Grasim’s VSF (viscose staple fibre) business reported its highest-ever quarterly production and sales volume of 134KT (kilotonnes) and 132KT, respectively. Photo: Bloomberg
Mumbai: Robust quarterly production and sales volume led Grasim Industries, the Aditya Birla Group’s textile and chemicals manufacturing company, report a 25% rise in consolidated net profit to Rs 1,116 crore during the April-June quarter. The June-quarter consolidated results are not comparable to those of the year-ago period because the previous year’s results do not include the results of the erstwhile Aditya Birla Nuvo Ltd, which was merged intro Grasim on 1 July 2017.
On a like-to-like basis, standalone net profit for the quarter stood at Rs 643 crore, up 85% from the Rs 347 crore a year ago, the company’s best ever performance.
Net revenue for the viscose business was Rs 2,480 crore, higher by 35% and EBITDA came in at Rs 586 crore, up 68%. The VSF (viscose staple fibre) business reported its highest-ever quarterly production and sales volume of 134KT (kilotonnes) and 132KT, respectively. The share of domestic sales in overall sales rose to 82% in the first quarter, compared with 69% in the year-ago period, primarily driven by the expansion of the domestic market and in-house brand Liva.
“Liva has 33 brand partners and if it were a standalone fashion brand, it would be the largest in India,” Grasim Industries Managing Director Dilip Gaur told Mint in an interview. “We are in the process of building manufacturing capabilities for Liva in Indonesia, after which we will also look at Turkey and Bangladesh.”
Net revenue from the chemicals business for the quarter rose 46% year on year to Rs 1,579 crore, and EBITDA (Earnings before interest, tax, depreciation and amortisation) increased 103% to Rs 495 crore. At the board meeting on Tuesday, the management approved the expansion plans for caustic soda and speciality chemicals at existing locations for total capital expenditure of Rs 1,112 crore. This would lead to a 14% increase in caustic soda capacity to 1,310 KTPA (kilo tonnes per annum) by 2020-22.
This brings the company’s standalone capital expenditure plan to Rs 7,539 crore, the majority of which will be funded by internal accruals during 2019 to 2021.
Grasim holds significant shareholding in Aditya Birla group companies Idea Cellular, UltraTech and Aditya Birla Financial Services, which contribute to the company’s consolidated earnings.
“Directionally however,” said Sushil Agarwal, group chief financial officer, “The standalone business’s performance is improving quarter on quarter and accounting for a bigger share. This quarter, 58% of our net profit was from the standalone business.”
Shares of Grasim closed up 0.04% on the BSE on Tuesday.