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Grasim posts 28% rise in profit on the back of healthy performance by UltraTech

Consolidated net profit grew by 28% at Rs 1,786 crore.

, ET Bureau|
Aug 14, 2019, 07.12 PM IST
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Grasim posted a 28% rise in its consolidated net profit for the April-June quarter on the back of healthy performance by subsidiaries UltraTech and Aditya Birla Capital even as the profit at standalone textile fibre and chemicals business declined to less than a third due to weak global prices.

Consolidated net profit grew by 28% at Rs 1,786 crore on the back of Ultratech that almost doubled its net profit in the quarter as well as Aditya Birla Capital that posted a 27% rise. The consolidated net income includes Rs 109 crore impairment charges that Grasim had to incur in carrying value on investment in Aditya Birla Payments Bank that is being wound up. Revenue from operations increased by 13% at Rs 18,861 crore. Consolidated operational income or Ebitda posted a 31% rise at Rs 4,217 crore.

In its standalone textile and chemicals business net profit declined by 69% at Rs 202 crore due to low realisations as global viscose staple fibre (VSF) prices declined by 21% since last year. Prices have fallen sharply on account of oversupply due to new capacities that have been commissioned in the recent past with the ongoing US-China trade war casting a negative sentimental impact.

Revenue in the VSF business grew marginally by 1% at Rs 2,509 crore. Chemicals business saw a decline of 5% in revenue at Rs 1,503 crore.

"At standalone level, there has been volume growth in both VSF and Caustic Soda, however, profitability was impacted due to global softening in prices," Grasim said in a release.

The company that makes fibre for textiles announced that it will be extending its brand 'Liva' to a new product of line of sarees. On the growth front the company's standalone capex program of about Rs 7,800 crore is on course that will raise capacities in both its VSF and chemicals business, apart from modernisation capex at various plants.

On the outlook, the company said that in the VSF business, new capacities commissioned in Asia in the recent past will continue putting pressure on prices. Chemicals business will gain from expansion in both its chlor-alkali and specialty chemicals business.
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