Grasim Industries, a company under the Aditya Birla Group banner reported a 18% fall in its net profit to Rs 549 crore in the third quarter of the current fiscal on the back weak market conditions for the textile sector, the main consumer of the fibre.
Surplus production of VSF by China coupled with stable cotton prices have also had an impact on the company's performance.
“The October- December quarter witnessed a lull in demand which caused us to report lower profits, but from this quarter onwards the scenario will be better,” said Adesh Gupta, whole time director and CFO of Grasim Industries.
However, this quarter cannot be compared to last year as Grasim's proportionate share amounting to Rs 25 crore in the loss incurred by the recently acquired pulp JV, AV Terrace Bay, Canada is included.
Also, last year during the same period UltraTech Cement, included subsidies amounting to Rs 86 crore for the earlier period.
The company's total income was up by 7.4% to Rs 6, 768 crore compared to Rs 6,300 crore in the same period last year.
Ultra Tech, the cement subsidiary's net revenue stood at Rs 5,164 crore compared to Rs 4,800 crore, while net profit for the december quarter stood at Rs 608 crore compared to Rs 598 crore during the same period last year.
The company in a release stated,” VSF plant at Nagda has started which will be undertaken in phases, spread over the next three years.”
The brownfield expansions at Chhattisgarh and Karnataka which is a total of 9.2 million tonnes per annum are on track. Clinker capacity is expected to be completed by the first quarter of the next financial year. After the expansion UltraTech's cement capacity will be 62 million tonnes per annum.