Grasim reports improved performance

Grasim Industries Ltd, an Aditya Birla Group company, has announced that its net revenue has increased 17% to Rs. 6364 crore in the third quarter ended 31 December 2011, largely driven by its cement business. PBIDT grew by 23% from Rs. 1267 crore to Rs. 1554 crore. The company’s net profit rose by 33% to Rs. 669 crore.

The company’s cement subsidiary, UltraTech Cement, reported revenue of Rs. 4865 crore and PAT of Rs. 598 crore. The sector demand growth improved to around 10% during the quarter on account of a lower base effect in the corresponding quarter. The sector capacity utilisation during the quarter improved to 73% as compared to 68% in the preceding quarter. The pricing environment is expected to remain challenging.

Variable cost rose by 16%, mainly on account of an increase in energy cost. This is attributable to a 30% rise in the price of domestic coal during Q4 FY10-11, as well as the continuous increase in the price of imported coal, and the rupee devaluation by approximately 14%.

Meanwhile, the company has confirmed that the Chhattisgarh and Karnataka brownfield expansion projects, aggregating 9.2 million tpa, are on track. These projects are expected to be operational by Q1 FY14.

A total capex of Rs. 11000 crore is under implementation in the cement business towards the expansion projects, strengthening of logistic infrastructure, setting up of captive thermal power plants, ready-mix concrete plants and modernisation projects.

Looking forward, Grasim Industries expects the cement surplus scenario to subside gradually over 2 – 3 years with an expected growth in demand. Energy prices are expected to continue to increase as Coal India Ltd’s changed price mechanism comes into effect this month.

Read the article online at: https://www.worldcement.com/asia-pacific-rim/24012012/grasim_reports_improved_performance/