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Informist, Friday, Aug 9, 2024

 

--Grasim Apr-Jun net loss 521.2 mln rupees

--Analysts saw Grasim Apr-Jun net profit 1.52 bln rupees

--Grasim Apr-Jun revenue 68.94 bln rupees

--Grasim Apr-Jun net loss 521.2 mln rupees vs 3.55 bln PAT

--Grasim Apr-Jun revenue 68.94 bln rupees vs 62.38 bln

--Grasim: Apr-Jun viscose segment revenue 37.87 bln rupees, up 6% YoY

--Grasim: Apr-Jun viscose segment EBITDA 4.05 bln rupees, up 4%

--Grasim: Apr-Jun viscose segment EBITDA 4.05 bln rupees, up 4% YoY

--Grasim:Apr-Jun chemicals segment revenue 20.66 bln rupee, dn 4% YoY

--Grasim: Apr-Jun chemicals segment EBITDA 3.1 bln rupees, dn 13% YoY

--Grasim: Ramping up paints' output across at commissioned 3 plants

--Grasim:Paints capex 77.95 bln rupee till Jun, 77% of planned outlay

--Grasim: Apr-Jun EBITDA margin 6% vs 12% year ago

--Grasim: Apr-Jun EBITDA 4.18 bln rupees, down 47% on year

--Grasim: Net debt 63.1 bln rupees Jun 30 vs 59.8 bln rupees Mar 31

--Grasim: Will take longer for weak global macro environ to normalise

--CONTEXT: Comments of Grasim mgmt in post-earnings investor call

--Grasim: Apr-Jun viscose realisations hit by oversupply in Indonesia

--Grasim:Viscose segment is cyclical, retail sales not great in India

--Grasim: Viscose segment margins to remain range-bound ahead

--Grasim: India caustic soda mkt continues to be in oversupply mode

--Grasim on paints ops: Dealer costs, advt spend charged to P&L acct

 

By Rajesh Gajra

 

MUMBAI – Grasim Industries Ltd not only reported weak earnings for the June quarter but also missed Street estimates on both the bottomline and the topline. The Aditya Birla Group company reported a net loss of 521.2 mln rupees in the June quarter as against a net profit of 3.55 bln rupees in the same quarter a year ago.

 

Analysts had estimated a net profit of 1.52 bln rupees for the company. Grasim's revenue increased by 10.5% on year to 68.94 bln rupees, and was below the average estimate of 73.12 bln rupees.

 

A major contributing factor to the weak earnings of the company was a 47% on-year fall in the operating profit, as denoted by earnings before interest, tax, depreciation, and amortisation, to 4.18 bln rupees. The EBITDA margins halved to 6% in Apr-Jun from 12% a year ago. The bottomline was also hit by finance costs jumping up 33% on year to 1.4 bln rupees, and depreciation and amortisation expense rising sharply by 21% to 3.49 bln rupees.

 

The chemicals segment of Grasim reported a 13?ll on year in EBITDA to 3.1 bln rupees due to lower volumes and lower realisations. Caustic soda sales volume declined 4% on year to 282,000 tn. According to the company, domestic caustic prices remained lower due to demand supply mismatch.

 

Revenue from chemicals segment declined 4% on year to 20.66 bln rupees. "The India caustic soda market remained in oversupply situation," the management told investors and analysts in a post-earnings conference call today. The management said that the company faced challenges amid tough world macro conditions. "The path to normalisation was a longer one," it said in the investor call.

 

In the viscose segment, Grasim reported a 6% on-year sluggish growth in revenue to 37.87 bln rupees and a 4% growth in EBITDA to 4.05 bln rupees. The company management said that viscose segment realisations were hit by oversupply in India among other factors.

 

The management said viscose segment is cyclical in nature and that "retail sales are not great in India." Going ahead, viscose margins will remain range bound, it said in the investor call.

 

With regard to its paints business, Grasim's management said that the production was being ramped up in three plants already commissioned. The company had began trial production run in paints in February but the plants went live only from Apr 30.

 

The sales from the two months of output from the commissioned plants in the June quarter were reflected in the revenue but the management did not disclose the quantum of sales. It said that the construction expenses on the plants, and maintenance costs were capitalised by the company, but the costs related to building dealer network and branding and advertisement costs were charged to the profit and loss account in the June quarter.

 

The paints capital expenditure as of Jun 30 was 77.95 bln rupee and covered 77% of the planned outlay, the company said.

 

Grasim's standalone net debt increased to 63.1 bln rupees as of Jun 30 from 59.8 bln rupees as of Mar 31. Today, shares of the company ended 1.1% up at 2,572.75 rupees on the National Stock Exchange.  End

 

Edited by Akul Nishant Akhoury

 

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