BUSINESS

Grasim reports lower net profit

SLOWDOWN IMPACTS: D. D. Rathi (right), Whole-Time Director, Grasim Industries, with Sanjeev Bafna, President & Deputy CFO, addressing a press conference in Mumbai on Tuesday.

SLOWDOWN IMPACTS: D. D. Rathi (right), Whole-Time Director, Grasim Industries, with Sanjeev Bafna, President & Deputy CFO, addressing a press conference in Mumbai on Tuesday.   | Photo Credit: — PHOTO: SHASHI ASHIWAL

Corporate Reporter

Recommends a dividend of Rs. 30 per share of Rs. 10 each

CHENNAI: Grasim has reported a five per cent rise in its consolidated revenues for the quarter ended March 31, 2009 to Rs. 5,020 crore from Rs. 4,765 crore in the year-ago period. Cash profit for the quarter at Rs.1,114 crore (Rs.781 crore), was higher by 43 per cent, due to the impressive performance of the cement business and the benefit of lower current tax. The net profit was lower at Rs.569 crore (Rs.599 crore), given the higher interest cost and substantially higher depreciation on account of commissioning of several new projects, the full benefit of which is expected to accrue only in the current year.

The company’s consolidated net revenues for the year grew by 9 per cent to Rs. 18,603 crore from Rs. 17,141 crore.

The net profit at Rs.2,187 crore (Rs.2,609 crore) was lower by 16 per cent due to higher interest cost and substantially higher depreciation, as various new projects were commissioned. The profitability was also impacted because of the increased input costs and economic slowdown, the company has stated in a release .

The directors have recommended a dividend of Rs.30 per share of Rs. 10 each, at par with the dividend paid last year.

Cement business reached a new milestone during the quarter recording a turnover of over Rs. 2,000 crore.

Volumes were up by about 13 per cent supported by new capacities. UltraTech Cement, a subsidiary of Grasim, reported a net profit of Rs. 312 crore as against Rs. 285 crore in the corresponding quarter. Net revenues improved by 17 per cent at Rs.1,929 crore, driven by a volume growth of 13 per cent.

Expansion

The company’s major projects are nearing completion. At Shambhupura (Rajasthan), one of the two cement mills was commissioned in the fourth quarter.

The second cement mill at Shambhupura and split grinding unit at Aligarh are expected to be commissioned in the first quarter of 2010.

During the year, a total amount of Rs.1,467 crore was spent on capex.

The company plans to invest a sum of over Rs.1,300 crore on capex in financial year 2010 for the completion of the existing projects and modernisation.

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