Grasim Industries Limited, the flagship company of the Aditya Birla Group, has posted a commendable performance for the quarter ended 30 June 2006.
Consolidated revenues at Rs.3,196 crore (Rs.2,474 crore) reflected an increase of 29 per cent. Despite a substantially higher provision for tax expense, which was up by 102 per cent at Rs.242 crore (Rs.120 crore), net profit surged by 47 per cent from Rs.296 crore to Rs.435 crore.
The major growth driver has been the cement business. The performance of viscose staple fibre business too was significant. The sponge iron business, however, suffered due to lower capacity utilisation, a steep rise in input costs and lower global scrap prices.
The stand-alone results for the quarter have been impressive as well. Notwithstanding the setback faced by its sponge iron business, the company clocked a substantially improved performance on all the three major parameters — revenues, gross profit and net profit. While revenues rose appreciably by 21 per cent from Rs.1,553 crore to Rs.1,877 crore, net profit recorded a growth of 24 per cent at Rs.312 crore (Rs.251 crore).
Viscose staple fibre (VSF) business - The performance of VSF business was good. Realisations were higher by 8 per cent at Rs.78,983 per ton in line with other textile fibres. Capacity utilisation, however, was lower at 70 per cent as against 82 per cent in the corresponding quarter due to shut down of VSF plant at Nagda for 45 days on account of water shortage.
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