Grasim Q1 net swells to Rs1,087 crore

Aditya Birla Group flagship Grasim Industries today reported a 61 per cent jump in it first quarter 2009-10 (April-June) net profit at around Rs1,087 crore against Rs672 crore in the same quarter of the previous financial year.
 
Consolidated revenue for the quarter rose 15 per cent to Rs5,123 crore against Rs4,448 crore in April-June 2008-09. Net profit was up 61 per cent at Rs1,080 crore (Rs672 crore in Q1 2008-09) which included an extraordinary gain of Rs336 crore (net of tax) arising from the sale of its sponge iron business.

Grasim's stand-alone revenue for the quarter stood at Rs3,079 crore (Rs2,618 crore). Despite higher interest cost and depreciation on new capacity created, net profit (after extraordinary gain) was higher by 69 per cent at Rs867 crore (Rs514 crore). The benefit of these new capacities will accrue fully in the subsequent quarters, as normally new plants take about a year to fully stabilise, the company said in a release.

The cement business has been the key contributor. The company has posted a higher profit, despite the adverse performance of the sponge iron business, which was disposed of during the year. The sponge iron business sold has shown a loss of Rs44 crore, as against a profit of Rs65 crore at PBIT level in the corresponding quarter, the release said.

The consolidated as well as the standalone results for the quarter are not strictly comparable with the corresponding quarter's results, owing to the sale of sponge iron business on 22 May 2009 and consolidation of Idea Cellular Limited as an associate from 1 January 2009, as against a JV earlier, the release noted.
 
On comparable basis (excluding sponge iron business from both Q1 FY10 and Q1 FY09 and consolidation of Idea as an associate in Q1 FY09) revenue increased by 25 per cent on stand-alone basis and by 24 per cent on consolidated basis.
 
PBIDT increased by 30 per cent on stand-alone basis and by 39 per cent on consolidated basis and net profit (before extraordinary gain) increased by 20 per cent on stand-alone basis and by 24 per cent on consolidated basis, it added.

The company will continue to have leadership position in cement and VSF business. With substantial increase in capacities, improved cost optimisation, higher productivity and strong fundamentals, the prospects for the company in the long term remain positive, though there may be bumpy road in the immediate future, it said.