Grasim Industries: Q4FY14 Result

Grasim Industries an Aditya Birla Group company announced its last quarter result for the fiscal year 2014, after the market hours on May 2, 2014. The company has remained under pressure to post healthy numbers throughout the quarter. The scrip on that day closed at Rs 2625 up by 0.44% from its previous close.

Grasim Industries has posted a topline of Rs 8418.73 crore during the quarter ended March 2014, reporting a jump of 10% on yearly basis. On segment wise performance, cement segment which contributes 74% of the total sales has increased by 8.5% YoY to Rs 6315.56 crore for Q4FY14. The viscose staple fibre (VSF) segment has increased by around 9% on yearly basis, whereas the chemical segment has surged by 47% on yearly basis during the quarter ended March 2014.

The operating profit of the company has remained under pressure. It has plunged by more than 3% YoY to Rs 1527 crore for Q4FY14. As far as EBITDA margin is concerned, the margin has plunged by 243 basis points on yearly basis to 18.13% during the March quarter 2014. The margin of the company was impacted due to hike in raw material cost, from Rs 1674 crore to Rs 1952 crore, a hike of 16.66% YoY during Q4FY14. Besides this the fuel cost (up by 13%) and freight (up by 14%) was also high for the quarter ended March 2014.

The company has posted a profit after tax (PAT) of Rs 679 crore a growth of 10% during the quarter ended March 2014 excluding the exceptional gain from the same quarter of previous year. The exceptional gain was on account of sale of Grasim's stake in Alexandria Carbon Black and Thai Carbon Black during Q4 FY13. Including the exceptional gain the company has posted a profit after tax (PAT) of Rs 679 crore during Q4FY14 reporting a fall of around 17% on yearly basis.

On the financial performance, the company said, "Despite the prevailing economic slowdown during the year, volumes have been augmented in all the businesses viz. VSF, Chemical and Cement, driven by the commissioning of new capacities".

On the outlook, the company said that the VSF sector, margins are likely to remain under pressure in the near term due to overcapacity in China. While in cement, the demand growth for the industry should gradually recover to 8% on improvement in the economic environment.

The shares of the company are trading at a price to earnings (P/E) of 11.64x. The company’s board has announced a dividend of Rs 21 per share on a face value of Rs 10 each. Today, the scrip of the company opened at Rs 2611, down by 0.53% from its previous close.