Grasim profit rises 60% on back of its cement, VSF businesses

Grasim profit rises 60% on back of its cement, VSF businesses
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First Published: Thu, Apr 26 2007. 12 04 AM IST
Updated: Thu, Apr 26 2007. 12 04 AM IST
Mumbai: Grasim Industries Ltd, the flagship company of the Aditya Birla Group, grew its net profit for the fourth quarter of 2006-07 by 60% to Rs559 crore, on the back of growth and higher capacity utilization in its key businesses.
The company, which is a leading producer of cement and viscose staple fibre (VSF), reported consolidated revenues of Rs4,107 crore for the quarter, up 40% over the previous year. According to D.D. Rathi, whole-time director and CFO of Grasim, the company’s performance was driven by growth in its key businesses of cement, VSF, sponge iron, textiles and chemicals.
For the year ended 31 March 2007, Grasim’s net profit grew 89% to Rs1,968 crore. The company’s consolidated revenue for the year rose 38% to Rs14,167 crore. Grasim’s operating profit for the year was at Rs4,290 crore. “For the first time in the history of our company, we have crossed the $1 billion mark in operating profit,” said Rathi.
Grasim’s share price gained 2.58% to close at Rs2,441.7 on the Bombay Stock Exchange on Wednesday.
Growth of Grasim’s cement business, which accounts for more than 70% of its consolidated revenue, was driven by higher capacity utilization and rise in sales volumes.
Revenue from cement rose 43.4% to Rs9,951.21 crore, compared with the previous year. “Capacity utilization of our cement facilities was at 110% for the year,” said Rathi. The company is currently increasing cement capacity by 14 million tonnes per year and expects benefits of this to accrue in the next fiscal. VSF and rayon grade pulp together brought in revenues of Rs2,725.25 crore.
“The company’s performance was lower than our estimates,” said an analyst of domestic brokerage Motilal Oswal Securities Ltd. “We had anticipated better realizations on VSF due to the increase in VSF prices.”
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First Published: Thu, Apr 26 2007. 12 04 AM IST