Grasim Industries Q1 Results: Net profit falls 6.6% to Rs 2,576.35 crore

Aditya Birla Group firm Grasim Industries on Thursday reported a decline of 6.61 per cent in consolidated net profit at Rs 2,576.35 crore for the June quarter, impacted by softening of realisations in domestic business and its subsidiary UltraTech Cement.

The company had posted a net profit of Rs 2,758.75 crore during the April-June quarter a year ago, Grasim Industries said in a regulatory filing.

 Its revenue from operations was up 10.78 per cent at Rs 31,065.19 crore during the quarter under review as against Rs 28,041.54 crore in the corresponding period of the previous fiscal.

"Consolidated revenue is up by 11 per cent YoY to Rs 31,065 crore driven by the strong performance of key subsidiaries UltraTech Cement, Aditya Birla Capital, and Aditya Birla Renewables," an earnings statement from Grasim Industries said.

However, softening of realizations in Standalone Businesses and UltraTech Cement impacted profitability, it added.

Grasim Industries' total expenses grew 14.46 per cent to Rs 27,923.38 crore in the first quarter of FY2023-24.

The total income of Grasim Industries in the June quarter rose 11.17 per cent to Rs 31,360.98 crore.

Grasim's revenue in the June quarter from viscose-pulp, viscose staple fibre (VSF) and filament yarn segment fell 16.65 per cent to Rs 3,583.61 crore from Rs 4,299.88 crore a year ago.

"Globally, the textile value chain has continued to remain sluggish, although some signs of improvement are seen in specific markets. China VSF operating rates have improved considerably," it said.

Revenue from its subsidiary and leading cement maker UltraTech Cement was 16.96 per cent higher at Rs 17,737.10 crore as against Rs 15,163.93 crore in FY2022-23.

"Cement Sales volume stood at 29.96 Million Tonnes (MT), up 20 per cent YoY in Q1FY24. Capacity utilisation for the quarter stood at 89 per cent compared to 83 per cent in Q1FY23," it said.

In the June quarter, it commissioned a cement capacity of 3 MT and with this, the total grey cement capacity of the company, so far, stands at 137.85 MT per annum (including an overseas capacity of 5.4 MTPA).

However, "the energy cost was higher by 3 per cent YoY, primarily due to currency devaluation. Additionally, there was a 6 per cent rise in raw material cost, mainly driven by the higher costs of fly ash and slag," it said.

Its revenue from the chemicals segment fell 21.5 per cent to Rs 2,145.76 crore in comparison with Rs 2,733.31 crore in the year-ago period.

It was "due to a decline in caustic realisations on account of falling international prices and domestic oversupply situation," said Grasim, which is the largest Caustic Soda producer in India.

Revenue from the financial services segment -- Aditya Birla Capital Ltd (ABCL) -- rose 26 per cent to Rs 7,030.21 crore over Rs 5,579.85 crore a year ago.

"ABCL reported PAT (profit after tax) growth of 51 per cent YoY to Rs 649 crore. Gross premium across life and health insurance grew 19 per cent year-on-year to Rs 3,877 crore. The total AUM (AMC, life insurance and health insurance) grew by 9 per cent YoY to Rs 3.9 lakh crore," it said.

Revenue from other segments increased 8.96 per cent to Rs 883.52 crore in the June quarter from Rs 810.80 crore.

Updating about the paints business, in which the Aditya Birla group firm is making a foray, Grasim said progress on 'Go to Market', branding and marketing is on track with our scheduled commercial launch set for Q4FY24.

"The plant construction and related infrastructure are in alignment with this launch. The total outlay for the Paints business up to 30th June 2023 stands at Rs 3,640 crore," it said.

Over its B2B E-Commerce Business Birla Pivot, Grasim said a full-scale platform for building materials has been launched to serve the markets in Maharashtra, Madhya Pradesh, and Delhi.

"The platform will ensure on-time delivery and superior quality products encompassing a broad spectrum of building materials such as Cement, Steel, Tiles, Plywood & Doors, Paints & Ply and Sanitary & Plumbing, among others. To this end, the team has successfully onboarded more than 120 brands across various categories," it added.

In the April-June period, total capex spent stood at Rs 1,384 crore, of which Rs 1,046 crore was spent on the Paints business.

Its budgeted capex for FY24 stands at Rs 5,791 crore, of which Rs 4,342 crore is earmarked for Paints and B2B e-commerce.

Shares of Grasim Industries on Thursday settled 0.78 per cent lower at Rs 1,830.50 apiece on the BSE.