Mumbai: Chemicals and textiles manufacturer Grasim Industries posted improved net profit for the March quarter, however, a one time exceptional charge and higher costs in the quarter pulled down the company's net earning.
Standalone net profit stood at Rs 373 crore, up by 18% since last year. Revenue from operations grew by 48% at Rs 4,606 crore. EBITDA for the quarter grew by 70% at Rs 947 crore. To be sure, however, the figures are not comparable on a year on year basis as last year's results do not include the performance of Aditya Birla Nuvo which was merged with the company effective from July 1, 2017.
An exceptional item of Rs 213 crore was incurred on stamp duty on acquisition of assets which pulled down the company's profits.
The Viscose Staple Fibre business reported a 15% increase in net revenue at Rs 2,232 crore. The business reported its highest ever sales volume for the year at 508 KT, led by growth in the domestic market and intense market development efforts.
Chemicals business net revenue reported an increase of 35% at Rs 1,439 crore. The company has given an in-principle approval of brownfield expansion of its caustic soda facility at multiple plant locations for Rs 1,000 crore. This will take the company's planned expenditure for the year to Rs 7,400 crore out of which Rs 6,400 crore has already been approved. Factoring in the planned expenditure by group cement company UltraTech of Rs 6,000 crore, the total consolidated expenditure for the year will touch Rs 13,000 crore, Sushil Agarwal, chief financial officer at Grasim said.
At a standalone level, the company had net free cash flow of Rs 400 crore after it spent Rs 2,000 crore on investments in the past year.
In its outlook for the year, the company said that the VSF business will continue to focus on expanding in the domestic market by partnering with the textile value chain, achieveing better customer connect through its brand Liva. However, new capacities likely to come up in China may impact prices in the near term,
For the chemicals busines, the company perceives demand from user industries like alumina and textile to grow.