The Aditya Birla Group company's consolidated net profit surged 44% to Rs 2,516 crore in Q3 FY23 as against Rs 1,746 crore recorded in Q3 FY22.
Revenue from operations was at Rs 28,638 crore during the quarter, registering a growth of 17% from Rs 24,402 crore reported in Q3 FY22. The rise in the revenue was mainly driven by strong performance of the subsidiaries.
Profit before tax climbed 75.58% year on year to Rs 5,086.66 crore in the quarter ended 31 December 2022.
Total expense spiked 22.11% YoY to Rs 26,501.18 crore in Q3 FY23. Cost of raw material consumed stood at Rs 5,091.72 crore (up 13.68% YoY), power and fuel expense was at Rs 6,083.76 crore (up 42.99% YoY) and employee expenses stood at Rs 1,797.08 crore (up 11.36% YoY).
EBITDA fell 6.65% to Rs 3,834 crore in Q3 FY23 as against Rs 4,107 crore posted in Q3 FY22. EBITDA margin declined to 13% in Q3 FY23 as compared with 17% recorded in the same period last fiscal.
The company said that it reported stable financial performance over 9MFY23 despite multiple headwinds and recessionary fears globally. While domestic consumption remained healthy, global macroeconomic conditions impacted export related demand. Operational profitability for the quarter was adversely affected by elevated input prices.
Grasim Industries said that Viscose Staple Fibre (VSF) value chain partners have witnessed a prolonged global demand slowdown on the back of geo-political instability, recessionary fears and consequential consumption slowdown. Thus, exports led demand from the value chain partners was impacted and ripples were felt across the Indian textiles market.
The global demand slowdown and resilient demand conditions in India led to increased exports from Indonesia to India at lower prices. Further, zero import duty in India on these imports created pressure on domestic prices. At the same time, input prices continued to remain at elevated levels.
The revenue for the Viscose business declined by 5% YoY to Rs 3,182 crore and EBITDA stood at Rs 63 crore, down 84% YoY. The lower operating rates of VSF at 71% coupled with pressure on pricing and high input costs have resulted in negative EBITDA in VSF business for Q3. However, this was offset by good performance of Viscose Filament Yarn (VFY) business.
In chemicals business, Chlor-Alkali (Caustic soda) volumes were up 2% YoY to 284KT in Q3 FY23. There was a slight tapering in demand on QoQ basis due to softness in sectors like textiles, pharma and others. Average quarterly spot prices (CFR SEA) for caustic were lower by 4% YoY to $694/ton compared to $724/ton in Q3 FY22.
Chlorine Integration increased to 60% this quarter compared to 56% in Q3FY22, supported by new Chloromethane (CMS) facility commissioned in Q3FY22. The business continues to work on adding more chlorine derivatives products in the portfolio.
The revenue for the chemicals business was at Rs 2,582 crore up 10% YoY and EBITDA stood at Rs 488 crore, down 8% YoY as the speciality chemicals segment saw normalisation of the realisations.
In paints business, Grasim said that the construction progress remains on track across all six plant locations and the R&D facility has been commissioned. It is now working on developing innovative products for unique customer experiences. The commercial launch is scheduled for Q4 FY24, as per plan, it added.
Meanwhile, in B2B E-commerce business, the firm said that most of the senior leadership team has joined and hiring for the next level is in process. Shortlisting of partners (sourcing, logistics, vendors, etc.) to provide an integrated fulfilment experience to customers is near completion. While the pilot operations have started from January 2023 the full-scale launch will commence from H1 FY24.
The total capex spent towards paints business till 31 December 2022 stood at Rs 1,817 crore. (Around 18% of the total planned outlay for the paints business).
The total capex for all other businesses was Rs 1,370 crore. in 9MFY23 against a budget of Rs 3,498 crore for FY23. The board has also approved an investment of Rs 363 crore for Chlorine derivatives projects in the Chemicals business.
Grasim Industries, a flagship company of the Aditya Birla Group, is a leading diversified player with leadership presence across many sectors. It is a leading global producer of viscose staple fibre and viscose filament yarn, the largest chlor-alkali, advanced material, linen yarn and fabrics producer in India. The company recently has entered paints business and setting up six plants across pan India locations.
Shares of Grasim Industries declined 1.15% to Rs 1,602.55 on the BSE.
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