Home / Knowledge / News / Textiles / VSF achieves better profitability in Q1, Grasim
VSF achieves better profitability in Q1, Grasim
Aug '10
Grasim Industries Limited, an Aditya Birla Group Company, announced its results for the 1st quarter ended 30th June 2010. Its Consolidated revenue stood at Rs.5,119 crores (Rs.5,134 crores). The revenue was up by 2%, excluding the revenue of the discontinued Sponge Iron Business from the corresponding quarter on a comparable basis.

Net profit for the quarter was at Rs.575 crores (Rs.744 crores). On the demerger of the Cement business, which until 30th September, 2009 was a division of Grasim, into Samruddhi Cement Ltd. (SCL), Grasim's shareholders were allotted equity shares of SCL, enabling them to have a direct participation in SCL. As a result, an amount of Rs.110 crores out of the net profit of SCL, which was the share of Grasim's shareholders, has been reduced as minority share. This has affected the net profit for the quarter. When added back, the net profit is at Rs.685 crores, lower by 8% on a like to like comparison to the corresponding quarter.

VSF has achieved better profitability. But, this has been negated by the sharp fall in cement realizations, more particularly in the Southern and Western regions, and high energy costs.

Viscose Staple Fibre (VSF)
VSF business has reported an improved performance. The recovery in global markets vis-à-vis the corresponding quarter, coupled with the cost push effect, has led to an increase in VSF prices. Capacity utilization was higher, despite the suspension of

operations at the Nagda plant in June 2010, due to the water shortage. With the advent of monsoon, the plant has resumed operations from 26th July, 2010.

As reported earlier, the Company plans to set up a 80,000 TPA VSF plant at Vilayat (Gujarat). The project is likely to be commissioned in FY13.

The recovery in the textile sector has slowed down due to Euro zone issues. The demand outlook remains cautious. High inventory level in the textile value chain is a cause of concern. This, coupled with rising pulp prices, may impact margins, going forward.

Chemical Business
The performance of the Chemical business has been encouraging. Caustic volumes grew by 9% on higher captive use. ECU realizations were lower by 11% on YoY basis, given the depressed caustic prices, though sequentially ECU realizations are up by 10% led by the recovery in chlorine and HCL prices. A gradual price recovery is expected with the improvement in global markets.

Stand-alone Financial Performance
On a stand-alone basis, Grasim's performance has been better, compared on a like to like basis. Revenue rose by 17% at Rs.964 crores. Net Profit at Rs.224 crores was up by 62%.

The Company may face pressure on profitability in the short term. However, the long term prospects of the Company remain positive with its leadership position in both Cement and VSF businesses, focus on profitable growth and strong fundamentals. The Company will emerge stronger from the downturn through proactive cost management and better asset productivity.

Grasim Industries Limited

Must ReadView All

President Tsai Ing-wen delivering remarks before boarding her plane bound for Central America. Courtesy: Presdient's office

Textiles | On 16th Jan 2017

‘Textiles at centre of Taiwan’s new trade arrangements’

Textiles should be at the heart of Taiwan’s thinking while developing ...

Apparel/Garments | On 16th Jan 2017

Ralph Lauren develops policy on tracking wood based fabrics

In a bid to trace source of wood based fabrics like viscose and rayon ...

Apparel/Garments | On 16th Jan 2017

EC proposes enhanced market access for Sri Lanka

The European Commission (EC) has proposed that a significant part of...

Interviews View All

Jurgen Gauger

‘Buying crowdsourced or creative designs are much more appealing to the...

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Claudia Kersten
Global Organic Textile Standard

‘GOTS is a very efficient supply chain management tool, especially for...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Iago Castro Asensio
RCfil Distribuciones S.L.

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

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

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

January 2017

January 2017

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


Browse Our Archives


Subscribe today and get the latest News update in your mail box.
Advanced Search