Grasim Q3 FY2013-14 results

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Projects commissioned during the year:

• Caustic Soda (183K TPA); Epoxy (52K TPA)
• Clinker (3.3 Mn. TPA); Cement (1.6 Mn. TPA)

Project to be commissioned in Quarter 4:

• Viscose Staple Fibre (120K TPA)

Consolidated financial performance
Grasim Industries Limited, an Aditya Birla Group company, announced its results for the quarter ended 31 December 2013. The company's performance was constrained due to subdued economic conditions. Revenue at Rs.7,120 crore grew by 5 per cent over the corresponding quarter last year. Net profit was Rs.332 crore as against Rs.549 crore.

Viscose Staple Fibre (VSF)
VSF business has recorded volume growth, supported by increased capacity at Harihar. Production increased by 4 per cent over the last year. Sales volume at 97,049 MT was up by 24 per cent, led by better performance in both domestic and exports markets.

The company was able to maintain the realisations, despite the sharp fall in the international prices, supported by the rupee depreciation. The input costs have gone up due to the increase in pulp prices coupled with rupee depreciation.

The performance of the Pulp JVs was affected on account of planned maintenance shutdowns. The anti-dumping duty levied in China impacted realisations and the volumes of pulp sold in China.

Cement subsidiary (UltraTech Cement)
The combined cement and clinker sales volume increased marginally at 10.76 Mn. tonnes. The industry volumes remained flat due to the continued slow down in the Indian economy. Based on continuous cost optimisation measures, the business has been able to contain the cost. Net revenue stood at Rs.5,173 crore (Rs.5,164 crore). Net profit was at Rs.395 crore (Rs.608 crore).

Chemical Business
The Chemical Business reported a growth of 14 per cent in sales volumes. ECU realisations improved over Quarter 2 but were flat on a Y-o-Y basis. The operations at Vilayat (Gujarat), which were impacted by the floods, have resumed in December 2013 and are being ramped up in a phased manner.

VSF and chemical capex
The epoxy project (51,500 TPA) at Vilayat was commissioned in December 2013. The VSF project (120,000 TPA) at Vilayat is expected to go on stream in a phased manner from Quarter 4.

Cement capex
With the commissioning of the grinding unit (1.6 Mn. TPA) at Jharsuguda, Odisha in October 2013, UltraTech's cement capacity stands augmented to 55.5 Mn. TPA. On commissioning of all the projects currently under implementation and the acquisition of Gujarat cement unit of Jaypee Cement Corp., total cement capacity will increase to 70 Mn. TPA.

Outlook
The current difficult market conditions have affected the performance of both the businesses. The performance of Cement Business should improve with the expected recovery post general elections in India and of VSF Business based on global rebalancing of excess capacity. The commissioning of major projects by the company will help improve volume and profitability.

Cautionary statement
Statements in this "Press Release" describing the company's objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities law and regulations. Actual results could differ materially from those express or implied. Important factors that could make a difference to the company's operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.