Grasim Q4 results preview: Aditya Birla group company may report weak numbers, margin seen under pressure

Grasim Industries – an Aditya Birla Group company – is expected to report a muted set of financial results for the quarter ended March 2023 on Friday, May 26, 2023. The profit of the cement products company may more than halve in percentage terms amid weak revenue in various segments.

According to Zee Business research, Grasim Industries is likely to report a net profit of Rs 322 crore for the final three-month period of the financial year gone by, which translates to a decline of 60.4 per cent year-on-year as compared to Rs 813.6 crore in the same period a year ago.

It should be noted that profit or PAT (profit after tax) for the March quarter in the fiscal year 2021-22 is profit from continuing operations, Zee Business analysts said in their preview. They pointed out that the Q4FY22 had a tax credit of Rs 406 crore.

The company’s revenue is estimated to be almost flat at Rs 6,490 crore for the March quarter of the fiscal year 2022-23, as against Rs 6,376 crore for the year-ago period.

The analysts peg Grasim Industries earnings before interest, taxes, depreciation and amortisation (EBITDA) – a measure of the company's overall financial performance – at Rs 693.4 crore for the January-March period, marking a jump of 7.8 per cent on a year-on-year basis.

They estimate the company’s margin – a key measure of a business's profitability – at 10.7 per cent, a decline of 110 basis points from 11.8 per cent in a year ago quarter.

Segment-wise, Zee Business analysts estimate VSF (Viscose Staple Fibre) segment revenue may come flat by around 1 per cent higher YoY. Grasim is India's pioneer in making VSF – a man-made, bio-degradable fibre that is fast emerging as a sustainable alternative to cotton.

While the chemical segment’s revenue is likely to decline by 12 per cent YoY during the quarter under review, the analysts expect. It added that both the VSF and the chemical segment will see a YoY decline in operating profit in Q4.