Grasim Industries' turnover, following the transfer of Indian Rayon's cement business, has gone up by 20.4 per cent to Rs 1,092.9 crore as against Rs 907.5 crore during the same period last year. Gross profit increased from Rs 101.2 crore to Rs 121.1 crore during the period.

According to a company release, "The cement business integration process has been complete. The merger of Indian Rayon's cement business with the company elevates Grasim to the position of a cement powerhouse."

With the company's Roddipalayam (near Trichy in Chennai) plant slated to go on stream by January 2000, its presence in the southern markets will increase significantly, the release added. The new planthas a capcity of 0.9 million tonne.

The company has not outlined any major capital expenditure plan for the year except for the completion of the Tamil Nadu plant. The company expects to improve the margins through the cost control and higher volumes in the key product segments, said the release.

While cement production volumes was at 21,54,508 tonnes during the quarter against 10,85,759 tonnes in the same period last year, viscose staple fibre production volumes stood at 43,013 tonnes against 42,760 tonnes last year, the release added.

White cement production volumes for the quarter was at 55,210 tonnes. Sponge iron registered a production of 1,73,000 tonnes refelecting a 9 per cent increase with sales volumes soaring 65 per cent.

While the company's interest for the quarter was higher at Rs 70.7 crore compared with Rs 67.2 crore, the depreciation stood at Rs 58.4 crore against Rs 44.3 crore. The company has provided Rs 3.7 crore towards tax during the quarter against Rs 8.7 crore last year. Otherincome was lower at Rs 9.19 crore against Rs 13.02 crore.

INSIGHT
Next quarter should be better

Though quarter to quarter results are not comparable as the cement division of Indian Rayon has been merged effective from October, 1998, the performance is good. Cement prices are rising across the country and Indian Rayon's division concentrated in Andhra Pradesh (where though traditionally prices are lowest in southern region, in the current quarter have risen to Rs 115-120 per bag from Rs 90-95) and southern Maharastra and Tamil Nadu. The price rise in Tamil Nadu is ranges between Rs 140-142 and Rs 165-170 per bag. The difference between the quantity produced and sold of sponge iron (though realisations were lower) indicates inventory clearance. Here again, prices are rising. The second quarter should be better. The stock after a dream run has been witnessing correction which has more to do with profit booking and impact of results of other cyclicals than expected performance.

--Urmik Chhaya