Input costs increased over 48 per cent YoY, and other expenses were also higher by 48 per cent from the year-ago quarter
Grasim Industries on Monday released its financial results for the quarter ended September 2022 and reported a 1.5 per cent year-on-year (YoY) fall in its standalone net profit at Rs 964 crore. The company had reported a profit of Rs 947 crore in the same quarter last year.
Its revenue from operations rose nearly 37 per cent YoY to Rs 6,745 crore. The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter under review jumped 19.4 per cent YoY to Rs 957 crore, but margins contracted 206 basis points to 14.18 per cent. A sharp rise in input costs and other expenses weighed on the company’s margins in the quarter under review. Input costs increased over 48 per cent YoY, and other expenses were also higher by 48 per cent from the year-ago quarter.
The global man-made cellulosic fibre (MMCF) industry witnessed a demand decline in Q2FY23 from the developed global economies due to high inflation-led recessionary market conditions. China’s average VSF operating rates reduced to 66 per cent in Q2FY23 from 76 per cent in Q1FY23 due to continued Covid-induced lockdowns in different cities and global demand decline.
The company said the first plant would be commissioned in the March quarter and the remaining plants by FY25 in a phased manner. Grasim said the construction work is in progress across five locations and will commence at the remaining one location in Q4FY23. “Parallelly, the plan for the commercial launch is under execution as per schedule,” it said. “Overall, the company is budgeted total capex for FY23 stood at Rs 6,720 crore, including Rs 3,542 crore for the paints business,” the company said.