Bengaluru: AdityaBirlaGroup-ownedGrasimIndustries reported a declineinprofitfor the fifth straight quarteronMonday, hit byweakpricesinits chemicals and textiles businesses.
The company’s standalone netprofitfell nearly 18 per cent to Rs 7.95 billioninthe three months ended Sept 30 from a year earlier.
Grasim’s standaloneprofitdoes not include the results of its units including Ultratech Cement andAdityaBirlaCapital.
The viscose staple fibre (VSF) business,Grasim’s largest segment, took a hit aspricesfor the key material usedinvarious kinds of clothes fell. This pushed revenue from the segment down to Rs 38.89 billion from Rs 39.03 billion a year ago, despite sales volumes rising 24 per cent.
Thedropmarks the fourth straight quarterly decline for the segment, which accounted for 60.4 per cent ofGrasim’s total revenue.
The company’s total revenue fell 4.5 per cent to Rs 64.42 billion, its second straight quarterly fall.
“Given the macro-economic situation, demandinglobal consuming markets like the US and Europe remains muted, though the festive season led to an uptickindomestic demand. Domesticpricesremained under pressure due to the softening of international VSFprices,” the company saidina statement.
Grasimgrappled with decliningpricesinits second-largest segment, the chemicals business, as well, weighed down by chemical products it makes such as caustic soda, leading to a nearly 27 per cent revenuedrop, despite sales volumes rising 3 per cent.
Caustic sodapriceshave started to improve from their lowsinthe first quarter, but analysts expect to see benefits only from the third quarter of fiscal 2024.
Last month,Grasim’s unit Ultratech Cement beat second-quarter revenue estimates while its diversified financial services subsidiaryAdityaBirlaCapital reported a climbinprofitearlier this month.
The company approved capital expenditure (capex) of Rs 1.44 billion for different businesses and has approved rephasing of spending of earlier approved capex entailing an additional spend of Rs 1.38 billion inthe current fiscal.
Budgeted capex for fiscal 2024 is revised at Rs 59.29 billion, the company added.
Grasim’s foray into the paints sector under the moniker ‘BirlaOpus’ is scheduled for the fourth quarter of fiscal 2024.
Shares ofGrasimclosed 0.9 per cent lower ahead of its quarterly results. They have risen 11.9 per cent so far this year.
(Published 13 November 2023, 17:25 IST)