Grasim Q2 net up 41% to Rs 1,359 cr, revenue up 26% to Rs 22,564 cr

Birla co buys land in 5 locations for paint business

The Aditya Birla group’s holding firm, Grasim Industries today said its consolidated revenue for the September quarter was up 26 per cent to Rs 22,564 crore while its profit after tax was up 41 per cent to Rs 1,359 crore on a year-on-year basis.

On a standalone basis, the company reported a 180 per cent jump in its standalone profit to Rs 979 crore in the September quarter when compared to the same period of fiscal 2021.  Its revenues were up 67 per cent to Rs 4,933 crore in the September quarter on a standalone basis.  

The company, which is making an entry into the paints business, said it has already acquired land in Punjab, Haryana, Maharashtra, Karnataka and Tamil Nadu to make paints. “These locations have been identified based on proximity to key consumption hubs across India. The process of environmental clearance is also underway for various project sites. The contracts for basic engineering and detailed engineering have been awarded,” the company said.

On its VSF business, the company said it has made considerable progress in its commissioning schedule and its brownfield expansion at Vilayat has been commissioned in November, while the second line will be ready for commissioning by December-end as planned. "The Chinese textile demand was impacted by weak business sentiment in the value chain. The VSF prices in China moderated during the quarter, however, the prices have witnessed a considerable improvement since October -- driven by drastic operating rate cuts in fibre and yarn manufacturing," it said.

The company said the demand for textile products bounced back in India during the September quarter with the onset of the festive season, phased reopening of schools, educational institutions, offices and increased textile sourcing from India by global brands as a part of the China plus One strategy. China Plus One is the business de-risking strategy of companies world-wide to avoid investing only in China and diversify business into other countries.

The VSF business also reported strong operational and financial performance driven by demand momentum and better product mix. The VSF business recorded the highest ever total sales volume with domestic sales volume, back to the pre-pandemic level. The share of value-added products in the overall sales mix almost doubled YoY to 27 per cent.

The company said caustic soda prices in India recovered from multi-quarter lows supported by the recovery in demand, tightness in supply led by production losses and higher export sales driven by better overseas realisation. The caustic soda capacity utilization stood at 86 per cent in Q2FY22, sequentially higher. The domestic demand for caustic soda was driven by the textile and pulp & paper sectors, it said.