Grasim Industries Q1 net profit down 66.6% to Rs 621 cr, revenue down 32.2%

Aditya Birla Group firm Grasim Industries Ltd on Thursday reported a66.61 per cent decline in consolidated net profit at Rs 620.74 crore for the first quarter ended June 2020, impacted by disruption in economic activities due to Covid-19 pandemic-induced lockdown.

The company had posted a net profit of Rs 1,859.61 crore during April-June quarter of the previous fiscal, Grasim Industries said in a regulatory filing.

Its revenue from operations declined 32.24 per cent during the quarter under review to Rs 13,621.10 crore as against Rs 20,103.04 crore in the corresponding period of previous fiscal.

“The results should be seen in the light of the unprecedented disruption in economic activities due to the Covid-19 induced lockdown in all the major markets during the quarter and the resultant demand & supply chain disruptions,” Grasim Industries said in a statement.

Total expenses stood at Rs 12,860.78 crore in the quarter under review as against Rs 17,478.16 crore in the year-ago quarter.

Revenue from viscose – pulp, viscose staple fibre and filament yarn segment declined 77.75 per cent to Rs 558.12 crore in Q1 of FY2020-21 as against Rs 2,509.11 crore a year ago.

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According to the company, the domestic textile industry was severely impacted by the extension of lockdown in key manufacturing hubs and reduced labour availability.

“The operational and financial performance of the viscose business was subdued for the months of April and May 2020 due to lockdown, but witnessed a steady improvement in the month of June 2020 and thereafter, with a rise in the capacity utilisation across the plants to 79 per cent currently,” it said.

Revenue from cement business UltraTech was down 33.15 per cent to Rs 7,633.75 crore as against Rs 11,419.74 crore in the corresponding quarter of previous fiscal.

“General disruption as a result of the lockdown impacted the business performance,” Grasim said, adding that some encouraging trends were seen during the latter part of May 2020 after steps to open up the economy were taken by the government.

Revenue from chemicals segment fell 53.16 per cent to Rs 704.20 crore from Rs 1,503.49 crore in the first quarter of 2019-20.

“In the chemical business, the chlorine derivatives products demand remained strong driven by demand from disinfectant and hygiene products,” the company said.

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During the quarter, caustic soda production staged a strong recovery in volumes ascapacity utilisation improved to 70 per cent in the month of June after a low of 23 per cent utilisation witnessed in April.

Revenue from financial services segment, Aditya Birla Capital, was up 10.79 per cent to Rs 4,016.74 crore as against Rs 3,625.23 crore a year ago.

“The NBFC and housing finance lending book stood at Rs 58,073 cr in Q1/FY21. The core operating profit in NBFC and housing finance was maintained despite slow recovery under lockdown.

“The business continues to have strong focus on quality of book and has reduced ticket sizes across the board,” the company said.

On the outlook, Grasim Industries said with easing of lockdown conditions and gradual resumption of economic activities, demand for the company’s products is expected to rise in the coming quarters

“The company with its inherent financial strength, operational excellence, and diverse product portfolio – cement, financial services, viscose and chemicals – is well poised to withstand temporary disruptions and sustain leadership across its businesses,” it said.

Shares of Grasim Industries Ltdon Thursday settled 0.86 per cent higher at Rs 631.90 on the BSE.