Grasim Industries on Friday reported a 72.7% (y-o-y) jump in its standalone net profit to Rs 315.5 crore on the back of a 12.4% (y-o-y) rise in revenue to Rs 3,116.6 crore and a 310 bps expansion in earnings before interest, taxes, depreciation and amortisation (EBITDA) margin to 16.9%. Both the top and the bottom lines of the Aditya Birla flagship, however, fell well short of Bloomberg consensus analyst estimates that had pegged revenue at Rs 3,641.3 crore and net profit at Rs 433.4 crore.
The company said viscose staple fibre (VSF) sales rose 2% (y-o-y) in Q4 to 1.33 lakh MT, while revenue rose 12% (y-o-y) to Rs 1,945 crore. Sushil Agarwal, Group CFO of the Aditya Birla Group said the company is currently operating at 100% VSF capacity and certain environmental clearances will see a 161 MT/day increase in capacity in the near term. Grasim’s chemicals business, on the other hand, saw a 6% (y-o-y) drop in caustic soda sales to 1.94 lakh MT, but revenue still managed a respectable 11% (y-o-y) rise to Rs 1,068 crore. Agarwal said increased chlorine supply in the industry due to new capacity addition limited caustic production.
He added that the company continues to focus on chlorine based value added products which have seen a 33% (y-o-y) rise in volume. Agarwal said that despite spending Rs 1,677 crore on consolidated capex in FY17, Grasim now has zero net debt and in fact has a surplus of Rs 2,225 crore. On Grasim’s proposed merger with Aditya Birla Nuvo, the company said it has received approvals from its shareholders and creditors and is now awaiting the National Company Law Tribunals’s approval. Agarwal said the merger will most likely be complete in the second quarter of the current financial year.