MUMBAI: Grasim Industries on Friday reported a 180 per cent year-on-year rise in net profit to Rs. 979.1 crore for the quarter ended September, which was sharply higher than Street’s estimate.
The company reported a 67 per cent on-year rise in revenue from operations to Rs. 4,933 crore, which was also above analysts’ expectations.
The company’s operating performance in the quarter was strong as operating profit jumped 87 per cent year-on-year to Rs. 1,504 crore aided by improvement in product realization for the company.
Grasim Industries said that it saw recovery in prices of caustic soda while VSF prices also showed strength.
While the company saw a 51.7 per cent on-year rise in total expenses to Rs. 4,94.4 crore, it managed to pass on most of it to end customers as reflected in the higher growth in the topline.
The gap between the cotton and viscose fiber prices widened further to record levels in the context of an unabated surge in cotton prices, which is positive for VSF prices going forward, Grasim Industries said. The company’s VSF business reported an operating profit of Rs. 514 crore in the quarter, up 201 per cent on-year, aided by strong volumes and improved product realizations.
The chemicals business of the company also saw a strong performance as sales grew 44.5 per cent on-year to Rs. 1,627 crore. The segment’s operating profit jumped 24 per cent on-year to Rs. 232 crore.
Caustic soda prices in India recovered from multi-quarter lows supported by a recovery in demand, tightness in supply led by production losses and higher export sales driven by better export realization, Grasim Industries said.
The improvement in product realizations across various business segments helped Grasim’s operating margins expand to 27 per cent in the reported quarter from 19 per cent a year ago.
In terms of its foray into the paints business, Grasim said it has so far spent Rs. 267 crore in the current financial year towards the acquisition of land for its plants. The company said it is undertaking basic engineering, equipment procurement and environmental clearance work at various locations.
Shares of Grasim Industries ended 0.7 per cent higher at Rs. 1,857.55 on the National Stock Exchange.
Source:economictimes.com