Home / Knowledge / News / Textiles / Higher input costs impair Grasim's VSF Q1FY15 margins
Higher input costs impair Grasim's VSF Q1FY15 margins
Aug '14
Viscose Staple Fibre (VSF) volume rose to 86,389 tons, up 11 percent at Grasim Ltd; a company of  Kumaramangalam Birla-led Aditya Birla Group in the first fiscal quarter ending June 30, 2014.
However higher input cost impaired the margins of the VSF division and realisations remained subdued due to overcapacity in China 
All the divisions of Grasim recorded healthy volume growth, leading to a 16 percent increase in sales from Rs. 6,938 crore in Q1FY15 against Rs. 8,044 crore in the corresponding quarter of last fiscal year. 
“Globally, the realisations from VSF remained subdued owing to overcapacity in China. Realisations for the company could be maintained, consequent to the depreciation of the rupee. But higher input cost impaired the margins in the business”, Grasim said.
PBIDT slipped to Rs. 1,488 crore in the quarter under review against Rs. 1,549 crore in Q1FY14 at Grasim. 
Interest and depreciation went up due to commissioning of the various projects, the full benefits of which will be available in a gradual manner. 
The tax charge was also higher due to lower exempt income and recent changes in the tax laws. As a result, net profit at Grasim too fell steeply to Rs 487 crore from Rs. 610 crore from a year earlier. 
Grasim said, line 1 and 2 entailing a total capacity 77,000 TPA have been commissioned at the green-field VSF project at Vilayat. It added that the work on the remaining two lines with a capacity of 44,000 TPA to manufacture specialty fibre is in full swing. 
The trial run for the 3rd line is expected to commence during this month and for the 4th line within two months thereafter. Post this expansion, the total VSF capacity of Grasim will be 498,000 TPA.
On its outlook for the VSF division, Grasim expects margins to remain under pressure in the near term due to the overcapacity in China. But following slowdown of new capacity additions in China should lead to an improvement in industry utilisation, which augurs well for the company, Grasim said. 
Grasim added that the focus on cost optimisation will continue unrelentingly.

Fibre2fashion News Desk – India

Must ReadView All

'Requirement of polyester filament yarn is increasing'

Textiles | On 19th Jun 2018

'Requirement of polyester filament yarn is increasing'

The requirement of polyester filament yarn (PFY) is increasing as it...

Courtesy: SAC

Textiles | On 19th Jun 2018

SAC to release pilot of Higg Facility Social Labour Module

The Sustainable Apparel Coalition (SAC) will release this year a...

Courtesy: Tim Savage from Pexels

Textiles | On 19th Jun 2018

Da Lat begins construction of $50mn wool yarn factory

Da Lat Worsted Spinning Limited Company has begun construction of a...

Interviews View All

Manuj Terapanthi

Transparent supply chain and fair trade will boost sustainable market

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Yashiki Gumber
Sahiba Fabrics

Fabric does not restrict us from fashion trends

Akshat Chaudhary

Aizome, Asia's first Fairtrade denim brand, is all set to launch next...

Apurva Kothari

No Nasties was the first fashion brand in India to make 100 per cent...

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Samar Firdos
Arvind Ltd

<b>Samar Firdos</b>, Chief Manager (Design) at Lifestyle Apparel Denim...

Akta Adani
India Boulevard

India Boulevard is a San Francisco-based curated fashion marketplace that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

June 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Advanced Search