The flagship holding firm of the Aditya Birla Group, Grasim Industries Ltd, reported a 45.64% decline in consolidated net profit at Rs 1,100.16 crore in the quarter ended September 2024, hurt by lower profitability in the cement business and the rise in interest and depreciation charges because of its investments in the renewables business.
Grasim Industries, holding firm for Aditya Birla group companies like UltraTech, Aditya Birla Capital, and Aditya Birla Renewables, filed a regulatory update that stated the company had logged a net profit of Rs 2,024.05 crore during the July-September quarter the previous year.
Its revenue from operations rose 11.05 per cent to Rs 33,562.85 crore during the quarter under review. It was at Rs 30,220.68 crore in the corresponding period of the previous fiscal.
The revenue growth was "driven by the superior performance of Financial Services, Cellulosic Staple Fibre and Specialty Chemicals businesses", Grasim Industries said an earnings statement.
EBITDA, consolidated, however, has declined "owing to the lower profitability in the cement business and initial investments in the paints business under brand Birla Opus", it added.
"Further, higher interest and depreciation charges on account of investments in the building materials and renewables businesses has led to lower PAT, Grasim has said.
Grasim Industries' total expenses for the September quarter rose by 15.75 per cent to Rs 31,993.03 crore.
Total income, which includes revenue from other sources, was at Rs 33,958.21 crore, up 11.31 per cent in the September quarter.
For the September quarter, Grasim clocked 6.07 per cent rise in revenue from its cellulosic fibre business at Rs 4,125.19 crore. This was driven by price improvement in CSF prices.
The CSF business reported its highest ever quarterly sales volume of 219 KT, which rose by 4 per cent YoY, driven by stable domestic demand. Higher sales volume and an improving trend in global prices boosted EBITDA margins, it said.
Grasim's chemical business revenues have risen by 3.31% to Rs 2,054.37 crore, with the company's increase in caustic soda international average spot prices boosting the move.
Building material business stood up at 3.25 percent at Rs 16,682.75 crore. In the July-September quarter of the previous fiscal, that was at Rs 16,156.14 crore.
The building materials include UltraTech, the newly launched paints business, and the B2B e-commerce business Birla Pivot.
The growth was "driven by paints and B2B e-commerce businesses," said Grasim.
But EBITDA on the segment stood at Rs 1,886 crore, down 28 per cent YoY, with large reductions on account of lower realisations in the cement business as well as initial investments in 'Birla Opus', the group's paints business.
It reported an 8 per cent YoY growth in its consolidated sales volume in the cement business of UltraTech to 27.84 million tonnes, albeit at lower realisation like others.
Grasim's new setup of paints business under the brand name 'Birla Opus' is ramping up its production.
Production is mounting cumulatively at the three plants commissioned in the first quarter of this financial year - Ludhiana, Panipat and Cheyyar. Trial production has started at Chamarajanagar and Mahad plants, it said.
"Birla Pivot, the B2B e-commerce business, revenue continues to grow in line with the plan and remains on track to achieve revenue of USD 1 billion in three years as announced in FY24," it said.
Revenue from the financial services business line -- Aditya Birla Capital Ltd (ABCL) -- increased 33% to Rs 10,251.58 crore. A year ago, it had been at Rs 7,707.91 crore.
"The total loan book of NBFC and HFC stood at 27 per cent YoY to Rs 1,37,946 crore. The overall AUM of AMC, life insurance and health insurance managed to cross the mark of Rs 5,00,000 crore, growing at 24 per cent YoY," it said.
While revenues from its other business, which also includes textiles, renewables and insulators stood at Rs 777.37 crore, up by 2.13%.
The capital expenditure, on the other hand, Grasim said it stood at Rs 1,884 crore for H1 FY25.
"The budgeted standalone capex for FY25 is Rs 4,691 crore, of which Rs 3,000 crore is towards new growth businesses.".
The board has approved investment in the additional pulp capacity in Harihar for Rs 287 crore and in textiles business for Rs 20 crore," it said.
Over the outlook, with its significant presence across businesses, the company said it is well-positioned to capitalise on the opportunities in diverse sectors of the fast-growing Indian economy.
"The government's continued focus on infrastructure & housing, manufacturing, financialisation and thrust on increasing economic prosperity of the large section of people augurs well for the company," it added.
Grasim Ltd ended Thursday at Rs 2,528.55 on BSE, 0.79% up over the previous close.
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