Higher costs saw Grasim Industries, on Friday, report a drop of 4 per cent in its consolidated net profit for the first quarter ended June 30, 2012, at Rs.718 crore against Rs.752 crore in the year-ago period. Revenue grew 16 per cent to Rs.6,832 crore on higher cement and viscose staple fibre (VSF) sales, but operating profit was flat at Rs.1,768 crore. Higher taxes and an increase in minority interest on higher cement profits led to the fall in profit, according to the company.
In a statement, Grasim said cement demand continued to grow at a healthy pace. Cement sales were up 5 per cent at 10.83 million tonnes during the quarter. Net revenue grew 17 per cent to Rs.5,363 crore and the net profit 14 per cent to Rs.764 crore.
The company’s 10.2 million tonne brownfield expansion is expected to be competed by the first quarter of 2013-14. In its outlook, Grasim said it expected cement prices to be volatile. The company said its VSF business was impacted as difficult economic environment continued to impact the textile industry.
The decline in realisation coupled with the increase in caustic soda and coal prices impacted profitability.
On a standalone basis, the company’s total income was up 20 per cent at Rs.1,258.3 crore with a 13 per cent lower net profit of Rs.273 crore.
