Grasim Industries has posted a 39.8% fall in net profit at Rs 1,514 crore for the quarter ended December, beating Street estimates. The Aditya Birla group company had posted a net profit of Rs 2,516 crore during the same period a year ago.
However, the net profit for the reporting quarter is not comparable as the firm had a fair value gain of Rs 2,754.27 crore in FY23 due to fair value of retained interest in derecognition of net assets of Aditya Birla Health Insurance (ABHI). This came after ABHI approved an investment of Rs 665 crore in the health insurer by Abu Dhabi Investment Authority (ADIA) in August 2022.
Without the fair value gain, Grasim Industries net profit rose by 48% from Rs 1,024 crore, the company said in a statement.During the quarter under review, the company’s revenue rose 11.6% to Rs 31,965 crore, compared with Rs 28,638 crore recorded during the same period a year ago. Its Ebitda rose 42.2% to Rs 6,461 crore from Rs 4,544 crore recorded during the same period a year ago.
A consensus estimate by Bloomberg was expecting the firm to post a consolidated net profit of Rs 436 crore. The comparable net profit was up 48% from the year-ago quarter, driven by performance of cement and financial services businesses. However, the sharp decline in realisations of caustic soda (in line with global market conditions) impacted the standalone performance, the company added.
The company’s Viscose Staple Fibre (VSF) volumes stood at 205 kilo tonne (KT), up by 34% on a year-on-year basis, while it was down 2% on a quarter-on-quarter basis. Viscose business posted revenue of Rs 3,715 crore and Ebitda of Rs 402 crore for Q3FY24, which were up 17% and 535% y-o-y, respectively.
Grasim’s chemical business revenue at Rs 1,996 crore was flat q-o-q and down 23% on a y-o-y basis. Ebitda for the quarter was up 12% q-o-q to Rs 264 crore (down 46% y-o-y) on the back of improved performance of chlorine derivatives business. Caustic Soda sales volume was up 5% y-o-y and down by 2% from the previous quarter to 299 KT in Q3FY24.
The firm’s capex for the quarter was at Rs 1,425 crore, of which Rs 1,088 crore was for the paints business. The company doubled its speciality chemicals (epoxy polymers and curing agents) capacity to 246 kilo tonne per annum (KTPA) in December 2023.
Its financial services subsidiary Aditya Birla Capital’s consolidated revenue and net profit grew by 27% and 39% y-o-y to Rs 8,800 crore and Rs 736 crore, respectively. The overall lending portfolio increased to Rs 1.15 trillion as of December 2023, up 34% y-o-y and 6% sequentially.