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Grasim net profit skids 25.33% in Q4FY15
04
May '15
Net profit for the fourth fiscal quarter ended March 31, 2015 at Indian viscose staple fibre (VSF) producer and part of the Kumar Mangalam Birla led, Grasim Ltd skid 25.33 per cent year over year.

According to a Grasim press release, its net profit slid 25.33 per cent to Rs 507 crore in the fourth quarter of fiscal 2015 from Rs 679 crore in the same quarter of fiscal 2014.

However on a like to like basis and excluding non recurring tax charges and exceptional items, net profit for the reporting quarter stood at Rs 555 crore as against Rs 614 crore in the prior fiscal fourth quarter.

However, fourth quarter of fiscal 2015 sales rose 4.77 per cent to Rs 8,418 crore from Rs 8,820 crore in the quarter ended March 31, 2014.

Grasim added that PBIDT for the quarter under review was maintained at Rs 1,658 crore compared to Rs 1,655 crore, amidst difficult market conditions and gradual ramping up of new capacities.

But finance and depreciation costs have gone up by 69 per cent and 7 per cent respectively, on commissioning and acquisition of new capacities, the full benefit of which, it said, will accrue going forward.

It also informed that due to the increase in the rate of surcharge, an additional provision of Rs 58 crore was made on the accumulated brought forward deferred tax liability.

The tax charge for the corresponding quarter last year was lower as provisions made in earlier years amounting to Rs 103 crore no longer required, were written back.

The Board of Directors of Grasim has recommended a dividend of Rs 18 per share and the total outflow on account of the dividend would be Rs 169 crore, which is inclusive of corporate tax on dividend.

With the commissioning of the greenfield plant at Vilayat, VSF production stood at 111,341 tons, up by 24 per cent, while sales volume was 118,486 tons.

The global weakening of competing fibres like polyester and cotton and the current overcapacity scenario, especially in China, has exerted pressure on VSF realisations, Grasim noted by saying.

Due to the water shortage caused by deficient rains last year, operations of the VSF plant at Nagda have been suspended from last week and operations will resume with the onset of monsoon.

The chemical business reported a growth of 21 per cent year on year growth in sales volume during the quarter with additional volumes from the Vilayat plant, while ECU realisations were lower in line with global prices.

Grasim expects the outlook for the VSF sector to remain challenging in the near term, given the over-capacity in the sector and the sharp reduction in prices of polyester and cotton.

However it also anticipates that the new plant at Vilayat with a higher share of speciality products will improve the product mix and profitability and its focus on cost optimisation will continue relentlessly. (AR)

Fibre2fashion News Desk - India

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