GRASIM, THE ADITYA BIRLA GROUP.s FLAGSHIP COMPANY
PERFORMANCE FOR Q1FY 2008
Consolidated Net Profit.............Rs.670 Crs. ..........Up 54%
Consolidated Net Revenue............Rs.4,063 Crs..........Up 26%
Consolidated Results
Rs. Crores
..........Q1FY08....Q1FY07....% Change
Net Revenue.....4,063.....3,213.....26%
Operating Profit (EBITDA)........1,369......972.....41%
Profit after Taxes......800......536.......49%
Less: Minority Share......130......101
Net Profit.......670......435......54%
EPS (Rs.).......73.......47.........54%
Grasim, an Aditya Birla Group Company, has reported good results for the quarter ended 30th June, 2007. VSF and Cement businesses which put in a commendable performance, have been the growth enablers.
Revenues grew by 26% at Rs.4,063 crores (Rs.3,213 crores). Net Profit rose by 54% at Rs.670 crores (Rs.435 crores).
Highlights of Grasim.s operations:
Q1FY08 Q1FY07 % Change
Production -
Viscose Staple Fibre....M.T.....68,755..45,194...52%
Cement Mn. M.T.........3.86....3.56....8%
White Cement....M.T.....92,594..83,045..11%
Sponge Iron.....M.T.....138,136.126,941.9%
Caustic Soda....M.T.....42,843..30,738..39%
Sales Volumes -
Viscose Staple Fibre....M.T.....69,396..51,957..34%
Cement Mn. M.T. .......3.90.....3.50...12%
White Cement.....M.T....85,005...81,143.5%
Sponge Iron......M.T....139,706..140,912..-1%
Caustic Soda.....M.T....42,872...30,712....40%
Viscose Staple Fibre (VSF) Business
The VSF business turned in a very good performance. Capacity utilisation was higher at 102% vis-à-vis 70% in the corresponding quarter. Production, as a result, was higher by 52% at 68,755 tons. During the corresponding quarter, utilisation was lower due to the shut down of the Nagda plant on account of water shortage. Sales volumes rose by 34% at 69,396 tons, a historical high for any quarter. Firm international prices backed by a strong global demand saw realisations rise. The increased dependence on captive pulp helped contain the impact of rising global pulp prices. The strengthening of the Rupee too had a positive impact on performance.
The Company.s plans on capacity expansions and modernization are progressing per schedule. At Kharach (Gujarat), the Company would be adding a new capacity of 63,875 tons per annum. This is expected to go on stream by the end of FY08. Plans are also afoot to increase the capacity of the Harihar (Karnataka) plant by around 31,000 tons per annum. Upon implementation of these plans, Company.s VSF capacity will stand increased at 365,000 tons.
Chemical Plant
The Chemical plant bettered its performance during the quarter. Production of caustic soda, which was affected in the corresponding quarter on account of water shortage, moved up by 39% at 42,843 tons. The stable caustic prices and steep fall in the prices of allied products affected realisations, which were lower by 10%. With new caustic soda capacity additions coming up, realisations are expected to be under pressure.
Cement Business
The Cement business clocked an improved performance. Capacity utilisation was higher at 118%, vis-à-vis 109% in the corresponding quarter. Sales volumes recorded a growth of 12% at 3.90 Mn. tons, vis-à-vis the sector growth of 9%. On a sequential basis, realisations were up marginally. Volumes in RMC business grew by 19%.
Fuel cost went up by 28% with the increase in the price of imported coal and petcoke. Freight cost was higher by 8%. However, higher dispatches through rail helped partially offset this impact.
Cement Subsidiaries
UltraTech Cement Limited (UltraTech), a subsidiary of Grasim, too reported good performance. Its sale of cement stood at 3.90 Mn. tons and clinker at 0.53 Mn. tons. Profit after tax was higher by 25% at Rs.260 crores.
Shree Digvijay Cement Company Limited, another subsidiary, has reported a satisfactory performance. Sales volumes of Cement & Clinker were higher by 16%. Net profit after tax was higher by 36% at Rs.15 crores.
Cement Capex plan
To meet the growing market demand, the Company is augmenting its Cement capacity by an additional 10.3 Mn. tons through greenfield and brownfield projects. The expansion plans at Shambhupura and Kotputli, both in Rajasthan, are on track. The Shambhupura Plant is slated to be commissioned by the end of FY08. The Kotputli Plant is expected to go on stream by the first quarter of FY09. Both the plants will also have Captive Thermal Power Plants. This will enable the Company to meet the challenge of growing energy costs and reduce its dependence on the State grid. The Company envisages a capital outlay of Rs.4,085 crores (net of capex spent in FY07) on ongoing capacity expansions, modernization, de-bottlenecking, RMCs and Captive Power Plants, to be spent over a 2-year period.
At UltraTech, a new brownfield capacity of 4.9 Mn. tons is being added at its plant at Tadpatri (Andhra Pradesh). Further, the grinding capacity at Pipavav (Gujarat) is being augmented by 2 Mn. tons. The capex envisaged is Rs.3,340 crores on expansion, setting up of power plants, de-bottlenecking and modernization. The amount is proposed to be spent over the next 3 years.
On completion of the expansion plans, Grasim.s cement capacity, including that of its subsidiaries, will go up by 17 Mn. tons to 48 Mn. tons. This increase represents more than 54% of Grasim.s current combined capacity.
Over the next 3 years, with large capacities announced by the industry, there could be a surplus scenario, which in turn could affect realisations by mid-FY09. However, given the strong growth in demand, the outlook for the Cement business continues to be positive.
Textile Business
The Board of Directors of the Company, at its meeting held today, has approved the sale/transfer of the textile units at Bhiwani (Haryana) on a going concern basis to a proposed subsidiary of the Company. The sale/transfer is subject to shareholders. and other requisite approvals.
This move will enable the new entity to have a more focused approach to the development of textile business and pursue emerging growth opportunities. Besides, this will also enhance Grasim.s shareholder value, through a greater focus on its two key business segments, viz., Viscose Staple Fibre and Cement.
PERFORMANCE FOR Q1FY 2008
Consolidated Net Profit.............Rs.670 Crs. ..........Up 54%
Consolidated Net Revenue............Rs.4,063 Crs..........Up 26%
Consolidated Results
Rs. Crores
..........Q1FY08....Q1FY07....% Change
Net Revenue.....4,063.....3,213.....26%
Operating Profit (EBITDA)........1,369......972.....41%
Profit after Taxes......800......536.......49%
Less: Minority Share......130......101
Net Profit.......670......435......54%
EPS (Rs.).......73.......47.........54%
Grasim, an Aditya Birla Group Company, has reported good results for the quarter ended 30th June, 2007. VSF and Cement businesses which put in a commendable performance, have been the growth enablers.
Revenues grew by 26% at Rs.4,063 crores (Rs.3,213 crores). Net Profit rose by 54% at Rs.670 crores (Rs.435 crores).
Highlights of Grasim.s operations:
Q1FY08 Q1FY07 % Change
Production -
Viscose Staple Fibre....M.T.....68,755..45,194...52%
Cement Mn. M.T.........3.86....3.56....8%
White Cement....M.T.....92,594..83,045..11%
Sponge Iron.....M.T.....138,136.126,941.9%
Caustic Soda....M.T.....42,843..30,738..39%
Sales Volumes -
Viscose Staple Fibre....M.T.....69,396..51,957..34%
Cement Mn. M.T. .......3.90.....3.50...12%
White Cement.....M.T....85,005...81,143.5%
Sponge Iron......M.T....139,706..140,912..-1%
Caustic Soda.....M.T....42,872...30,712....40%
Viscose Staple Fibre (VSF) Business
The VSF business turned in a very good performance. Capacity utilisation was higher at 102% vis-à-vis 70% in the corresponding quarter. Production, as a result, was higher by 52% at 68,755 tons. During the corresponding quarter, utilisation was lower due to the shut down of the Nagda plant on account of water shortage. Sales volumes rose by 34% at 69,396 tons, a historical high for any quarter. Firm international prices backed by a strong global demand saw realisations rise. The increased dependence on captive pulp helped contain the impact of rising global pulp prices. The strengthening of the Rupee too had a positive impact on performance.
The Company.s plans on capacity expansions and modernization are progressing per schedule. At Kharach (Gujarat), the Company would be adding a new capacity of 63,875 tons per annum. This is expected to go on stream by the end of FY08. Plans are also afoot to increase the capacity of the Harihar (Karnataka) plant by around 31,000 tons per annum. Upon implementation of these plans, Company.s VSF capacity will stand increased at 365,000 tons.
Chemical Plant
The Chemical plant bettered its performance during the quarter. Production of caustic soda, which was affected in the corresponding quarter on account of water shortage, moved up by 39% at 42,843 tons. The stable caustic prices and steep fall in the prices of allied products affected realisations, which were lower by 10%. With new caustic soda capacity additions coming up, realisations are expected to be under pressure.
Cement Business
The Cement business clocked an improved performance. Capacity utilisation was higher at 118%, vis-à-vis 109% in the corresponding quarter. Sales volumes recorded a growth of 12% at 3.90 Mn. tons, vis-à-vis the sector growth of 9%. On a sequential basis, realisations were up marginally. Volumes in RMC business grew by 19%.
Fuel cost went up by 28% with the increase in the price of imported coal and petcoke. Freight cost was higher by 8%. However, higher dispatches through rail helped partially offset this impact.
Cement Subsidiaries
UltraTech Cement Limited (UltraTech), a subsidiary of Grasim, too reported good performance. Its sale of cement stood at 3.90 Mn. tons and clinker at 0.53 Mn. tons. Profit after tax was higher by 25% at Rs.260 crores.
Shree Digvijay Cement Company Limited, another subsidiary, has reported a satisfactory performance. Sales volumes of Cement & Clinker were higher by 16%. Net profit after tax was higher by 36% at Rs.15 crores.
Cement Capex plan
To meet the growing market demand, the Company is augmenting its Cement capacity by an additional 10.3 Mn. tons through greenfield and brownfield projects. The expansion plans at Shambhupura and Kotputli, both in Rajasthan, are on track. The Shambhupura Plant is slated to be commissioned by the end of FY08. The Kotputli Plant is expected to go on stream by the first quarter of FY09. Both the plants will also have Captive Thermal Power Plants. This will enable the Company to meet the challenge of growing energy costs and reduce its dependence on the State grid. The Company envisages a capital outlay of Rs.4,085 crores (net of capex spent in FY07) on ongoing capacity expansions, modernization, de-bottlenecking, RMCs and Captive Power Plants, to be spent over a 2-year period.
At UltraTech, a new brownfield capacity of 4.9 Mn. tons is being added at its plant at Tadpatri (Andhra Pradesh). Further, the grinding capacity at Pipavav (Gujarat) is being augmented by 2 Mn. tons. The capex envisaged is Rs.3,340 crores on expansion, setting up of power plants, de-bottlenecking and modernization. The amount is proposed to be spent over the next 3 years.
On completion of the expansion plans, Grasim.s cement capacity, including that of its subsidiaries, will go up by 17 Mn. tons to 48 Mn. tons. This increase represents more than 54% of Grasim.s current combined capacity.
Over the next 3 years, with large capacities announced by the industry, there could be a surplus scenario, which in turn could affect realisations by mid-FY09. However, given the strong growth in demand, the outlook for the Cement business continues to be positive.
Textile Business
The Board of Directors of the Company, at its meeting held today, has approved the sale/transfer of the textile units at Bhiwani (Haryana) on a going concern basis to a proposed subsidiary of the Company. The sale/transfer is subject to shareholders. and other requisite approvals.
This move will enable the new entity to have a more focused approach to the development of textile business and pursue emerging growth opportunities. Besides, this will also enhance Grasim.s shareholder value, through a greater focus on its two key business segments, viz., Viscose Staple Fibre and Cement.
