InvestorQ : How do you see the latest quarterly results of Grasim Ltd for the Sep-20 quarter?
Lavanya Subramanian made post

How do you see the latest quarterly results of Grasim Ltd for the Sep-20 quarter?

Anamika Sodhani answered.
2 years ago

Grasim top line was absolutely flat for the Sep-20 quarter at Rs.18,400 crore. It must be recollected that Grasim still runs the textiles and viscose staple fibre (VSF) business under its own brand but the other businesses cement and financial services are run by subsidiaries.

Despite the sales being flat for the Sep-20 quarter, operating profits were higher by 24.3% at Rs.2442 crore. This can be attributed to sharply lower cost of materials consumed in the core businesses of chemicals and viscose staple fibre. As a result the operating margin or OPM expanded from 10.68% in Sep-19 quarter to 13.27% in Sep-20 quarter.

However, the PAT was down 19.53% at Rs.1185 crore. There is a reason for the same. This includes exceptional charges for impairment but does not include the exceptional gains earned on discontinued operations. As a result, PAT margins shrank from 8.00% to 6.44% in Q2. In the absence of the exceptional items, the profits would have bene higher.

Continuing on the topic of the exceptional items, Grasim booked an exceptional loss of Rs.335 crore in Sep-20 quarter due to impairment of assets and receivables in Ultratech, which houses its cement business. Grasim booked profits of Rs.359 crore from discontinued operations in this quarter which is not considered as only continued operations are here.

Out of the total revenues of Grasim as a group, 56% is accounted for by cement by Ultratech and 25% by financial services and Aditya Birla Financial Services. The balance 19% comes from VSF, caustic soda, chemicals and other businesses.