Grasim Q1 profit down 12 percent to Rs 2,267.74 cr, revenue up 9 percent to Rs 33,860.75 cr

Aditya Birla Group flagship holding firm Grasim Industries Ltd on Friday reported a decline of 12 percent in its consolidated net profit at Rs 2,267.74 crore for the first quarter ending June 2024, on account of higher depreciation and interest charges resulting from new growth businesses.

The company had posted a net profit of Rs 2,576.35 crore during the April-June quarter a year ago, according to a regulatory filing by Grasim Industries, which controls leading group companies such as UltraTech, Aditya Birla Capital and Aditya Birla Renewables Its revenue from operations was up 9 percent to Rs 33,860.75 crore during the quarter under review from Rs 31,065.19 crore in the corresponding period of the previous fiscal.

The revenue growth was "driven by a strong performance from its diversified businesses portfolio. Cellulosic Staple Fibre, Building Materials, and Financial Services businesses delivered superior performance," said an earning statement from Grasim Industries. However, Grasim's EBITDA was lower by 4 percent at Rs 4,760 crore, which was on account of Grasim's investments in the Paints business Birla Opus.

"Further, higher depreciation and interest charges on account of new growth businesses have led to lower PAT," Grasim added. Total expenses of Grasim Industries were 12 percent higher in the June quarter to Rs 31,249.17 crore. Its total income, which includes revenue from other sources, was up 8.92 percent in the June quarter to Rs 34,160.77 crore.

Grasim's revenue from its Cellulosic Fibre business in the June quarter was up 5.68 percent to Rs 3,787.25 crore. Its CSF (Cellulosic Staple Fibre) business achieved its highest-ever quarterly sales volume at 212 KT up 14 percent YoY."The CSF business experienced its fourth consecutive quarter of YoY growth due to an improving domestic demand scenario and global price trends," it said.

While its CFY (Cellulosic Fashion Yarn) recorded marginal volume growth of 2 percent YoY, due to subdued demand conditions in the downstream value chain, and lower-priced exports into India by Chinese producers. Grasim's revenue from Chemicals business was down 3.73 percent to Rs 2,065.67 crore in the June quarter.

"EBITDA for the Chemicals segment stood at Rs 310 crore, up by 59 percent QoQ but declined 13 percent YoY. Profitability improved sequentially on the back of higher caustic soda realizations and improved margins of chlorine derivatives," it said. However, revenue from its Building Material business reported a growth of 4.66 percent to Rs 18,701.19 crore.

It was at Rs 17,867.18 crore in the April-June quarter a year ago. Grasim's 'Building Materials' comprises its Cement business UltraTech, its newly launched Paints business, and its B2B e-commerce business Birla Pivot. The increase in the revenue was led by the "growth in Cement and ramp-up in revenues from new growth businesses - Paints and B2B E-Commerce," it said.

The consolidated sales volume of UltraTech grew by 7 percent to 31.95 million tonnes and ready-mix concrete sales volumes grew by 22 percent.Its new set up of paints business under the brand name 'Birla Opus' is ramping up production across product categories at three already commissioned plants. Trial production has also commenced at the Chamarajanagar plant and the total Capex for the business is Rs 7,795 crore till June 2024.

This is "77 percent of the planned Capex outlay" of Rs 10,000 crore which Grasim had announced earlier."Birla Pivot, the B2B e-commerce business, has achieved a quarterly run-rate revenue of above Rs 550 crore," it said adding that the business is continuously adding new buyers with a healthy rate of repeat orders.

Similarly, revenue from the financial services segment -- Aditya Birla Capital Ltd (ABCL) -- was up 25.27 percent to Rs 8,806.85 crore from Rs 7,030.21 crore a year ago."The overall lending portfolio (NBFC and HFC) increased by 27 percent YoY and 3 percent QoQ to Rs 1,27,705 crore.

The total AUM (AMC, life insurance, and health insurance) grew by 20 percent YoY to Rs 4,62,891 crore," it said. Revenue from its other business, which includes - Textiles, Renewables, and Insulators - was up 5.9 percent to Rs 798.01 crore. Share of Grsim Industries on Friday settled at Rs 2,576.10 apiece on BSE, up 1.26 percent from the previous close