24 January 2012
Grasim reports better performance for Q3 FY12
|Rs. in crore|
|Consolidated net revenue||6,364 17%|
|Consolidated net profit||669 33%|
|Capex under implementation|
|VSF and allied chemicals||3,400|
Consolidated financial performance:
Grasim Industries Limited, an Aditya Birla Group company, today announced its results for the third quarter ended 31st December 2011. The company’s performance has been encouraging. Cement business has been the major driver. Net revenue increased by 17 per cent at Rs. 6,364 crore (Rs. 5,461 crore). PBIDT grew by 23 per cent from Rs. 1,267 crore to Rs. 1,554 crore. Net profit at Rs. 669 crore (Rs. 502 crore) rose by 33 per cent.
Production and sales volumes:
|Q3FY12||Q3FY11||Per cent change||Q3FY12||Q3FY11||Per cent change|
|Viscose staple fibre||M.T.||84,233||83,026||1||78,215||84,621||(8)|
|Cement (consolidated)*||Mn M.T.||10.44||9.90||5||10.44||9.93||5|
|White cement||Lakh M.T.||1.54||1.47||5||1.50||1.44||4|
|*Including Star Cement volumes|
Viscose Staple Fibre (VSF)
The business performance was subdued due to the challenging environment. After witnessing an upturn in September, sentiments were affected during the quarter as cautious approach was adopted by the textile value chain, given the Euro zone uncertainties. Consequently, demand and prices remained under pressure, impacting volumes by 8 per cent. Increase in input costs due to rupee depreciation, impacted operating margins.
Cement subsidiary (UltraTech Cement)
UltraTech reported revenue of Rs. 4,865 crore and PAT of Rs. 598 crore. The sector demand growth improved to around 10 per cent during the quarter on account of a lower base effect in the corresponding quarter. The sector capacity utilisation during the quarter improved to 73 per cent as compared to 68 per cent in the preceding quarter. Although post-monsoon, the pricing scenario indicated some improvement, the pricing environment is expected to remain challenging.
Variable cost rose by 16 per cent, mainly on account of increase in energy cost. This is attributable to 30 per cent rise in the price of domestic coal during Q4 FY10-11 and continuous increase in price of imported coal as also the rupee devaluation by approximately 14 per cent.
The chemical business continued to deliver good performance. Caustic production at 68,741 tonnes grew by 3 per cent supported by full capacity utilisation. Sales volumes were higher by 6 per cent. Caustic prices remained firm in line with international trends.
VSF and chemical capex
The VSF (120,000 TPA) and chemical (182,500 TPA) greenfield projects at Vilayat, Gujarat and brownfield expansion (36,500 TPA) of VSF at Harihar, Karnataka are in line with the schedule. The construction activity is in full swing. These projects are slated for commissioning in FY13. A total capex of Rs. 3,400 crore has been earmarked for the VSF and chemical business for expansion projects and modernisation.
Further, plans are afoot to set up a 180K TPA greenfield VSF plant in Turkey in joint venture with Group companies. Grasim has invested 1/3rd of the initial capital required for acquiring land and meeting initial expenses.
The Chhattisgarh and Karnataka brownfield expansion projects aggregating 9.2 million TPA, are on track. Both these projects are expected to be operational by Q1FY14.
A total capex of Rs. 11,000 crore is under implementation in the cement business towards the expansion projects, strengthening of logistic infrastructure, setting up of captive thermal power plants, ready-mix concrete plants and modernisation projects.
In VSF, the demand may remain volatile in the present macro economic conditions. In cement, the surplus scenario should subside gradually over a period of 2-3 years with an expected growth in demand. The changed pricing mechanism by Coal India Limited with effect from January 2012 will lead to increase in energy costs. The rising energy cost is a challenge in both the businesses in the present context.
Capacity expansions under implementation will enable the company to grow at a rapid pace and consolidate its leadership even further.
Cautionary Statement Statements in this 'Press Release' describing the Company’s objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities law and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.
For more information, contact:
Dr. Pragnya Ram
Group Executive President
Corporate Communications & CSR
Aditya Birla Management Corporation Private Limited
Tel: 91-22-6652 5000 / 2499 5000
Fax: 91-22-6652 5741/ 42