The Aditya Birla Group company Grasim Industries on Tuesday posted a 27% year-on-year decline in its consolidated net profit to Rs 799.03 crore for the three months ended September 30, 2017. This is the first quarter the company has reported earnings post the merger of erstwhile Aditya Birla Nuvo (ABNL) with Grasim that became effective from July 1, 2017. Consequently, the numbers are not comparable as previous year financial results does not include the erstwhile ABNL numbers.
However, operationally it was a strong quarter boosted by good performance in viscose staple fibre, chemicals and cement businesses. The consolidated net sales surged 63% y-o-y to Rs 13,646 crore, while the Ebitda (earnings before interest, tax, depreciation and amortisation) was up 34% to Rs 2,805 crore.
Commenting on the earnings, Sushil Agarwal, group CFO, Aditya Birla Group, said, “There were several one-time entries this quarter, which is why as we moved from the PBT level to PAT, there has been an impact of those. The finance cost, for instance, includes Rs 239 crore of interest on account of acquisition of Jaypee assets. ABNL was not merged with Grasim, which it is in this quarter, therefore, those costs are also getting reflected in the numbers,” he said.
While in individual businesses — viscose business Ebitda margins were up 22% for the quarter on the back of higher realisation and improved operational efficiencies. Also, VSF volumes were up by 5% y-o-y led by inventory restocking in domestic market. Viscose consumption and growth is better than other fibres which is getting reflected in the numbers and realisation figures, despite cost pressures, Agarwal said. Results also include revenue of Rs 200 crore and Ebitda of `61 crore of the VFY business, which is now part of Grasim post-ABNL merger.
As for chemicals, he said Ebitda for the quarter registered an increase of 34% y-o-y, while the company is increasing the portfolio of chlorine-based value-added products. Brownfield expansion of 144K tonnes per annum at Vilayat, Gujarat, is on schedule and is expected to be commissioned by March 2018.
Grasim’s cement subsidiary UltraTech reported an increase in consolidated revenue by 20% to Rs 6,936 crore, while its Ebitda increased by 12% to Rs 1,550 crore. On the cost front, energy cost was up by 26% with higher petcoke and coal prices, also logistic cost was up by 5% due to increase in diesel cost and change in sales pattern.
Meanwhile ABCL, (formerly known as Aditya Birla Financial Services) was listed on the stock exchanges on September 1, 2017, as the culmination of the composite scheme of arrangement under which ABNL merged with Grasim Industries (Grasim), and the financial services undertaking was subsequently demerged into ABCL. ABCL has launched a single brand “Aditya Birla Capital” encompassing all the financial services entities of the Aditya Birla Group. ABCL reported a consolidated revenue of Rs 2,677 crore during the quarter and a net profit of Rs 217 crore. The NBFC lending book (including housing) was at Rs 44,675 crore, while total assets under management at Rs 2.45 lakh crore.