Grasim Industries' consolidated net profit slumped 66.61% to Rs 620.74 crore on 32.24% decrease in revenue from operations to Rs 13,621.10 crore in Q1 June 2020 over Q1 June 2019.
Profit before exceptional items and tax tumbled 60.11% to Rs 1,159.69 crore in Q1 June 2020 as against Rs 2,907.48 crore in Q1 June 2019. The Q1 result was declared during trading hours today, 13 August 2020. During the quarter, the company reported an exceptional loss of Rs 215.10 crore.
Consolidated EBITDA fell 41.42% to Rs 2613 crore in Q1 FY21 over Rs 4461 crore in Q1 FY20. The results have been severely impacted due to the unprecedented disruption in economic activities on account of COVID-19 induced lockdown in all the major markets during the quarter and the resultant demand & supply chain disruptions.
The net revenue for the viscose business segment stood at Rs 558 crore with a drop in the sales volume for both viscose staple fibre (VSF) and viscose filament yarn (VFY). The share of value-added products in the overall sales volume improved to 30% in Q1FY21, up by 6% on a sequential basis. The global prices of VSF continued to remain weak during the quarter, exerting pressure on the domestic grey VSF prices.
For the current year, the company's board has approved capex plan for Rs 1,615 crore keeping in mind the temporary disruption in the company's earnings. The capex includes raising capacities in VSF in FY22, apart from ongoing modernisation capex at various plants.
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The company said that with the easing of lockdown conditions and the gradual resumption of economic activities, demand for its products is expected to rise in the coming quarters. The company has initiated various measures to optimize operations across plants, reduce its fixed costs and conserve cashas part of its comprehensive business continuity plan. The company continues to maintain a very comfortable level of liquidity to navigate an uncertain business environment. The company with its inherent financial strength, operational excellence,and diverse product portfolio (cement, financial services, viscose and chemicals) is well poised to withstand temporary disruptions and sustain leadership across its businesses.
Shares of Grasim Industries rose 0.61% to Rs 630.35 on BSE. Grasim Industries is a leading manufacturer in cement, viscose staple fibre and chemicals.
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