17-Jun-2024Today's Market Indicators


Grasim Inds skid after Q4 PAT declines 4% YoY to Rs 1,369 cr
(15:38, 26 May 2023)

Revenue from operations grew by 16% year on year to Rs 33,462 crore in the quarter ended 31 March 2023. The rise in the revenue was mainly contributed by the strong performance of key subsidiaries.

Profit before tax in Q4 FY23 was at Rs 3,415.03 crore, up 6.99% to Rs 3,191.92 crore recorded in Q4 FY22.

Total expense rose 17.72% YoY to Rs 30,354.70 crore in fourth quarter of FY23. Cost of raw material consumed stood at Rs 5,911.93 crore (up 16.07% YoY), power and fuel expense was at Rs 6,372.70 crore (up 27.38% YoY) and employee expenses stood at Rs 1,877.92 crore (up 12.81% YoY).

EBITDA improved by 5% to Rs 4,873 crore in Q4 FY23 as against Rs 4,647crore posted in Q4 FY22. EBITDA margin reduced to 14% in Q4 FY23 as compared with 16% recorded in the same period last fiscal.

Grasim Industries said that globally, the Viscose Staple Fibre (VSF) industry witnessed a sharp recovery in Q4 FY23 following an exceptionally subdued environment in Q3 FY23. The reopening of the Chinese markets has aided the overall pickup of demand. China VSF average operating rates increased to 69% for Q4FY23 compared to 66% in Q3FY23 with an exit at 80%. The increase in demand has reduced the average inventory levels to an average of 23 days, down from a peak of 27 days in Q3FY23. VSF prices improved to $1.68/kg (March'23) compared to $1.53/kg (December'22) due to market improvement. Although raw material prices and energy costs remained elevated, they showed a declining trend.

The company's sales volume of VSF increased by 25% QoQ and 7% YoY to 192KT for Q4 FY23. Viscose business revenue increased to Rs 3,764 crore, an 18% jump from Q3 FY23, whereas on YoY basis it was flat. The VSF EBITDA turned positive in Q4FY23 and VFY margins have improved on the back of better realisations and lower raw materials prices. Overall Viscose EBITDA stood at Rs 144 crore in Q4 FY23, registering a growth of 127% QoQ and 42.86% YoY.

In chemicals business, the global caustic soda market remained oversupplied with flat demand. Average quarterly spot prices (CFR SEA) for caustic were lower by 25% QoQ to $518/ton compared to $694/ton in Q3 FY23.

Chlor-Alkali (caustic soda) sales volumes were up 5% YoY and 1% QoQ to 286KT in Q4 FY23. Chlorine Integration stood at 58% for this quarter compared to 60% in Q3 FY23, due to a temporary shutdown of the Phosphoric Acid plant, which restarted operations in April FY23. The revenue contribution of chlorine derivatives in the Chemicals business increased to 18% in Q4 FY23 compared to 16% in Q4 FY22.

The speciality chemicals (epoxy polymers and curing agents) business saw normalisation of realisations. However, the demand momentum remains strong in the wind energy sector. The contribution of speciality chemicals improved with the softening of raw material prices.

The revenue for the chemicals business was at Rs 2,397 crore, recording a decline of 7% QoQ and 3.6% YoY. EBITDA stood at Rs 368 crore in Q4 FY23 (down 25% QoQ and down 26.25% YoY) as the ECU was sequentially down by 10% to Rs 42,136 per MT.

In paints business, Grasim said the construction activity on all six plants is on track as planned and the R&D facility is fully operational. All the business plan activities are progressing in line with the plans, leading to the commercial launch as scheduled beginning Q4 FY24 in phases.

Meanwhile, in B2B E-commerce business, the firm said that the Go-to-Market strategy and outreach plan have been finalised. The company has already onboarded a leadership team across sales, marketing, category & operations for the full-scale launch scheduled in Q2 FY24. This launch will be in a phased manner beginning with the states of Maharashtra and Madhya Pradesh.

On full year basis, the company's consolidated net profit fell 3.87% to Rs 6827.26 crore despite of 22.91% jump in revenue to Rs 1,17,627.08 crore in FY23 over FY22.

The total capex spent for FY23 stood at Rs 4,307 crore including Rs 1,979 crore towards the paints business till 31 March 2023.

Meanwhile, the company's board has recommended a dividend of Rs 10 per equity share for FY23, subject to approval of shareholders at the ensuing AGM.

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.

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