Grasim approves Rs 1,615-cr capex plans for FY21 to tackle Covid-19 crisis

Aditya Birla Group firm Grasim Industries Ltd on Thursday announced a capex plan of Rs 1,615 crore for the ongoing fiscal in view of business disruptions caused by the Covid-19 pandemic.

In its earnings statement, the company specifies cost rationalisation, demand creation, working capital management and innovation, among others, as key focus areas.

"For the current year, the board has approved a capex plan for Rs 1,615 crore keeping in mind the temporary disruption in the company's earnings," Grasim Industries said.

The capex includes raising capacities in VSF (viscose staple fibre) in FY22, apart from ongoing modernisation capex at various plants, it added.

According to the company, it is tightening working capital and capex spends.

Earlier in June, Grasim Industries, the flagship company of the $48.3 billion Aditya Birla Group, had stated that it would review its capex plans as it was expecting a significant impact on its April-June quarter due to Covid-19.

The company plans to expand its production capacity to 801 KTPA (kilo tonnes per annum) from 566 KTPA and its capacity of chemicals from 1,147 KTPA to 1,457 KTPA.

For other business such as VFY, epoxy, textiles, fertiliser and insulator, Grasim Industries has spent Rs 25 crore in the first quarter and would spend Rs 103 crore in the remaining period, the statement said.

According to the post result investor presentation, out of the total capex Grasim Industries has already spent Rs 131 crore in the April-June quarter and rest Rs 1,484 crore would be spent in three quarters of this fiscal.

Grasim Industries has reported 66.6 per cent decline in consolidated net profit at Rs 620.74 crore for the first quarter ended June 2020.

Its revenue from operations fell 32.24 per cent to Rs 13,621.10 crore.

Grasim is a leading global producer of VSF, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India's largest cement producer and a leading diversified financial services player.