Result Update - Grasim Industries Ltd.

By a staff reporter:  Consolidated Quarterly Result

•    Sales rose 25.71% to Rs 22564.22 crore in the quarter ended September 2021 as against Rs 17949.53 crore during the previous quarter ended September 2020.

•    Net profit of Grasim Industries rose 40.66% to Rs 1359.19 crore in the quarter ended September 2021 as against Rs

966.30 crore during the previous quarter ended September 2020.

•    The company reported a consolidated EBITDA of Rs 4,282 crore, growth of 19% y-o-y from Rs 3,603 crore reported last year. However, the EBITDA margins in the quarter declined marginally by 1% y-o-y to 19%

•    The demand momentum picked up in Q2FY22 and has continued thereafter across all businesses. Backed by strong demand, realisation and volumes have improved in key businesses, offsetting the cost increase.

•    The company’s Viscose business reported strong operational and financial performance buoyed by strong demand.

•    The business witnessed a y-o-y growth of 79% in revenues which stood at Rs 3,005 crore for the quarter compared

to Rs 1,679 crore in the same period last year. On a sequential basis, the business witnessed an improvement of

43% in revenues.

•    Viscose business EBITDA jumped 201% y-o-y to Rs 580 crore from Rs 193 reported last year. On a q-o-q basis, the

EBITDA improved by 19%.

•    “Improved product mix (Value Added Product sales up 112% y-o-y) and higher sales volume (up 18% y-o-y) led to an improvement in EBITDA for VSF business despite escalation in input costs, the company said.

•    The chemicals business of the company also witnessed strong performance as revenues grew 44 % y -o-y and 13%

q-o-q to Rs. 1,627 crore. The segment’s EBITDA jumped 24% y-o-y but declined 16% q-o-q to Rs. 232 crore.

•    The domestic demand for caustic soda was driven by textile and pulp & paper sector.

•    “While chlorine realisation turned marginally negative for the quarter due to weak end-products demand, caustic soda prices in India recovered from multi-quarter lows”, said the company.

•    Caustic soda prices were supported by recovery in demand, tightness in supply led by production losses and higher export sales driven by better export realization.

•    The company, which is making an entry into the paints business, said it has already acquired land in Punjab, Haryana, Maharashtra, Karnataka, and Tamil Nadu to make paints. These locations have been identified based on proximity to key consumption hubs across India. The process of environmental clearance is also underway for various project sites, the company said. About its viscose staple fibre (VSF) business, the company said it has made considerable progress in its commissioning schedule and its brownfield expansion at Vilayat has been commissioned in November; the second line will be ready for commissioning by December-end as planned. 'The VSF prices in China moderated during the quarter, however, the prices have witnessed a considerable improvement since October driven by drastic operating rate cuts in fibre and yarn manufacturing, it said.

Source : Eureka

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