Grasim Industries Q3 profit rises 68% to Rs 4,455 crore; revenue up 17.35%

Aditya Birla Group firm Grasim Industries Ltd on Tuesday reported an increase of 67.75 per cent in its consolidated net profit at Rs 4,454.59 crore in the third quarter ended December 2022, driven by a strong performance of its subsidiaries. The company had posted a net profit of Rs 2,655.45 crore during the October- December quarter of the previous fiscal, Grasim Industries said in a regulatory filing. Its revenue from operations was up 17.35 per cent at Rs 28,637.86 crore during the quarter under review as against Rs 24,402.24 crore in the corresponding period of the previous fiscal.

This was "driven by strong performance of the subsidiaries UltraTech Cement and Aditya Birla Capital," said Grasim Industries in its earnings statement. Total expenses of Grasim Industries were at Rs 26,501.18 crore, up 8.57 per cent in Q3/FY23, as against Rs 21,702.61 crore a year ago Grasim Industries' revenue from viscose-pulp, viscose staple fibre (VSF) and filament yarn segment was down 4.61 per cent to Rs 3,181.50 crore in Q3/FY23 as against Rs 3,335.44 crore a year ago.

This coupled with pressure on pricing and high input costs resulted in negative EBITDA in the VSF business for Q3. "VSF value chain partners have witnessed a prolonged global demand slowdown on the back of geopolitical instability, recessionary fears and consequential consumption slowdown. Thus, exports led to demand from the value chain partners was impacted and ripples were felt across the Indian textiles market," it said.

Revenue from its subsidiary and the leading cement maker UltraTech Cement was up 19.53 per cent to Rs 15,521.04 crore as against Rs 12,984.93 crore of Q3/FY22.
During the October-December quarter, UltraTech's "cement sales volume stood at 26 MTPA, up 12 per cent YoY. Capacity utilisation for the quarter stood at 83 per cent compared to 75 per cent in Q3FY22".

Its revenue from the chemicals segment was up 10.44 per cent at Rs 2,582.42 crore as against Rs 2,338.21 crore in the third quarter of FY22, as the speciality chemicals segment saw normalisation of the realisations. "The speciality chemicals (Epoxy Polymers and Curing Agents) business saw realisation level normalise from the peak seen in FY22, as global supply chain issues eased. This business is innovatively increasing applications in infrastructure, mobility and renewable energy," it said.

Revenue from the financial services segment -- Aditya Birla Capital Ltd (ABCL) -- was up 22.9 per cent to Rs 6,882.32 crore as against Rs 5,599.93 crore a year ago. ABCL added 1.4 million customers during the quarter, taking the total active customer base to 43 million, said Grasim Industries. While revenue from other segments was up 19.62 per cent to Rs 746.22 crore in the October-December quarter of FY23 as against Rs 623.78 crore. Updating about the paints business, in which the Aditya Birla group firm is entering, Grasim said construction progress remains on track across all six plant locations.

It has already commissioned R&D facility and is now working on developing products. "The commercial launch is scheduled for Q4FY24, as per plan," it added. Over its B2B e-commerce business, Grasim said most of the senior leadership team has joined and hiring for the next level is in process.

"Shortlisting of partners (sourcing, logistics, vendors, etc.) to provide an integrated fulfilment experience to customers is near completion. While the pilot operations have started from January 2023, the full-scale launch will commence from H1FY24," it said.

On capex plan, Grasim said total capex spent towards paints business till December 31, 2022 stood at Rs 1,817 crore, which is 18 per cent of the total planned outlay for the paints business.

"The total capex for all other businesses was Rs 1,370 crore in 9MFY23 (nine-month period of FY23) against a budget of Rs 3,498 crore for FY23. The board has also approved an investment of Rs 363 crore for chlorine derivatives projects in the chemicals business," it added. Shares of Grasim Industries Ltd on Tuesday settled at Rs 1,605.10 on BSE, down 1 per cent from the previous close.

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