Grasim Industries Q4 consolidated net profit falls
19 May '09
4 min read
Although the VSF business improved its performance in Q4FY09 as compared to Q3FY09, the outlook for the business is expected to remain subdued. Though there has been a marginal recovery in prices in Q1FY10, the long term outlook remains uncertain due to VSF overcapacity in China and relative prices of competing fibres. Margins may improve slightly with the reduction in pulp cost.
Production at Nagda will have to be stopped from end-May, 2009 till the onset of monsoon, due to water shortage. This would, however, not impact the profitability of the business, as adequate inventory has been built-up to ensure that the customers' demand is met.
Chemical Plant During Q4FY09, Caustic Soda volumes rose by 16%. ECU realization was higher by 10%, but this was more than offset by the increase in salt and power cost, resulting in lower margins.
During the year gone by, the business recorded historically its highest production and sales volumes. Caustic prices ruled firm as its production was restricted by the lower off take of chlorine. However, the steep increase in salt and power cost impacted margins. Production will have to be curtailed in June, 2009 till the onset of monsoon, due to water shortage.
Going forward, Caustic prices may witness pressure due to the fall in International prices and increase in imports.
Outlook The Company will continue to strengthen its leadership position in Cement and VSF sectors. Substantial increase in capacities, improved cost optimization, higher productivity and strong fundamentals augur well for the Company in the years to come.
-Ltd..jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Thermore (Far East) Ltd.")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Telangana State Industrial Infrastructure Corporation Limited (TSllC Ltd)")
.jpg?tr=w-120,h-60,c-at_max,cm-pad_resize,bg-ffffff "Taiwan Textile Federation (TTF)")
