Grasim Industries has allotted 10,000 - 7.63% Rated, Listed, Unsecured, Redeemable Non-Convertible Debentures (NCDs) of Rs 10 lakh each (Series 22-23 II, 7.63% GIL 2027) aggregating to Rs 1,000 crore, on private placement basis. These NCDs have been rated “AAA (STABLE)” by CRISIL and ICRA.

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Net profit of Grasim Industries declined 25.75% to Rs 1009.17 crore in the quarter ended September 2022 as against Rs 1359.18 crore during the previous quarter ended September 2021. Sales rose 21.79% to Rs 27485.54 crore in the quarter ended September 2022 as against Rs 22567.48 crore during the previous quarter ended September 2021.

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Revenue from operations jumped 22% to Rs 27,486 crore in quarter ended 30 September 2022 as against Rs 22,567 crore recorded in the corresponding quarter previous year.

Consolidated profit before exceptional items dropped by 20.26% to Rs 2444.05 crore in Q2 FY23 from Rs 3065.16 crore reported in Q2 FY22.

EBITDA fell 11.65% to Rs 3,783 crore in Q2 FY23 as against Rs 4,282 crore posted in Q2 FY22. EBITDA margin declined to 14% in Q2 FY23 as compared to 19% recorded in the same period a year ago.

Total expenses spiked 27.79% year on year to Rs 25,383.52 crore in Q2 FY23. Cost of material consumed was at Rs 5,278.41 crore (up 33.93% YoY) and power and fuel cost stood at Rs 5,487.86 crore (up 70.82% YoY), during the quarter.

The company said that in India the demand for Viscose Staple Fibre (VSF) remained largely intact, but value chain partners for the global markets have started witnessing the impact of recessionary conditions. VSF business reported a sales volume of 170KT was up 10% on a YoY basis, though 14% down on a QoQ basis due to demand conditions coupled with cheaper imports from Indonesia and China. In view of this, the company has rationalised the production of VSF in phases, leading to overall capacity utilisation at approximately 70% currently.

With respect to Chemical business, the company said that the Caustic soda sales volume was up 17% YoY to 296KT in Q2 FY23 on the back of new capacities commissioned in H2 last year (Rehla and BB Puram). Chlorine VAPs sales volume was up by 19% YoY. Global caustic soda prices have softened this quarter compared to Q1 FY23, mainly due to the easing of global supply chain conditions. This has led to sequentially lower ECU realisation in domestic markets too.

Captive consumption of chlorine increased during the quarter witnessing double-digit growth on YoY basis on the back of its new VAP facility commissioned. Overall, Chlorine integration stood at 61% in this quarter compared to 56% in Q2 FY22. The business is working on plans to add new Chlorine VAPs in the portfolio to increase the Chlorine integration levels

Advanced Material business realisation continued to normalise after peaking last year. Sales volume was up by 8% YoY, with a rising share of specialty products.

Grasim said that its paints business is focused on the timely execution of the plan. The first plant is to be commissioned in Q4 FY24, and the remaining plants by FY25 in a phased manner. The construction work is in progress across five locations and will commence at the remaining one location in Q4 FY23. Parallelly, the plan for the commercial launch is under execution as per schedule, it added.

Meanwhile, the company's B2B E-commerce business plan is under execution for launch by Q2 FY24 as scheduled, the company stated.

The total capex budgeted to be spent during FY23 stood at Rs 6,720 crore, including Rs 3,542 crore for the paints business. Against this budgeted amount, the actual spend till H1 FY23 is Rs 1,524 crore. The company said that the additional capex of Rs 565 crore has been approved by the board for existing businesses, out of which Rs 382 crore is expected to be spent in FY23.

Grasim Industries, a flagship company of the Aditya Birla Group, is a leading diversified player with leadership presence across many sectors. It is a leading global producer of viscose staple fibre and viscose filament yarn, the largest chlor-alkali, advanced material, linen yarn and fabrics producer in India. The company has made an entry into the paints business and setting up six plants across pan India locations.

Shares of Grasim Industries gained 2.40% to Rs 1,750 on the BSE.

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Grasim Industries will hold a meeting of the Board of Directors of the Company on 14 November 2022.

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