The figures are, however, not comparable as the first half figures include workings of the cement business of Indian Rayon which has been transferred to Grasim.

Gross sales was higher at Rs 2,452.93 crore against Rs 2,062.15 crore, while net sales increased from 1,806.74 crore to Rs 2,117.77 crore during the period.

Gross profit increased to Rs 259.4 crore from Rs 196.81 crore, while profit before interest, depreciation & tax was 21 per cent higher at Rs 402 crore.

Company's chief financial officer DD Rathi said: "The merger of the cement divisions has led to greater synergies of operations which helped us realise better margins. In the first half the cement division has outperformed the industry with a 21 per cent growth in production."

Grasim president Shailendra Jain said that while the company plans to remain among the top three cement players, it has not chalked out any brownfield or greenfield expansion for the medium-term.

Commenting on Grasim's possible future acquisitions in cement (it acquired Shree Digvijay Cement and Dharani Cements last year) Jain said: "Acquisitions cannot be planned. We are definitely open on further acquisitions and will look at the right opportunities."

Jain added that a plan to unify all the Grasim brands is currently underway but declined to give a deadline by when it will be through. "There are strong regional brands which the subsidiaries own, and it will not be in the interest of the company to discontinue established brands," Jain said.

The diversified Grasim, which also has interests in viscose staple fibre and sponge iron, has an installed cement capacity of 9.75 million tonnes, which is being expanded to 10.65 million tonne by the end of the current fiscal.

The company is investing around Rs 290 crore in a brownfield expansion at subsidiary Dharani Cements.

Rathi said that while sponge iron does not remain a core business of the company, it does not plan to divest from it in the short-term. "The division has been performing well, though realisations has been lower," he added.

The sponge iron division registered a 33 per cent increase in production but realisation was down due to lower scrap prices.

The VSF division recorded a marginal increase in production, but realisations remained lower. The cement business was the only division where realisations were higher, at 4 per cent increase in grey cement and 15 per cent rise in white cement in the second quarter.

INSIGHT:

Cement operations boosts net

The all-round improvement in Grasim's profitability can be attributed to its cement operations. While grey cement realisations have increased 4 per cent during the quarter ended September as compared to the corresponding period in the previous year, white cement realisations have increased 15 per cent. The realisations from the VSF and sponge iron businesses have continued to worsen. The fact that the previous year's figures include only one month's working results of the cement capacities acquired from Indian Rayon makes the company's performance seem more impressive.

-- Sarad Saraf