Grasim PAT rises 24% in Q1

Our Corporate Bureau
28 July 2003

Mumbai: Grasim (www.grasim.com), the flagship company of the Aditya Birla group, has reported a turnover of Rs 1,175 crore (Rs 1,136 crore) for the quarter ended June 2003.

The net profit after total tax expense was up by 24 per cent at Rs 131 crore (Rs 105 crore), even after factoring the substantially higher tax expenses, at Rs.50 crore.

That despite the shutdown of two of its viscose staple fibre (VSF) plants for nearly 45 days in the quarter, due to an acute water shortage, Grasim has delivered such a performance, is indeed commendable.

VSF business
Given the good monsoon, the VSF plants at Harihar and Nagda have since resumed operations. Lower capacity utilisation at 71 per cent this quarter, vis-à-vis 82 per cent in the corresponding quarter of the earlier year and a 15-per cent decline in sales volume is attributable to the water shortage. Higher realisation and maximum cost-optimisation have enabled the company to partially offset the impact on its VSF operations.

To provide a long-term solution to the water shortage, the company has increased the height of its captive reservoir at Nagda. Alongside, it is building a reservoir also at Harihar. Going forward, these measures will help minimise the impact of poor monsoons.

The company has been aggressively growing the VSF business through widening the product reach and application. It has also formed strategic alliances with leading fabric manufacturers. Positioning VSF at the premium end of the market, as the ideal fibre in terms of feel, comfort, fashion and hygiene, is ongoing. The Birla Viscose brand has been very well established among the quality-conscious user segments.