Aug 21, 2018 - The caustic soda prices in India moderated during the quarter led by .... is regulated by the Securities
Quarterly Result Update
GRASIM INDUSTRIES LIMITED August 21, 2018 Consolidated Results
Current Price:
`1042.05
In Cr. Qtr Ended
Qtr Ended
Jun. 18
Jun. 17
VAR %
16856.70
10986.09
53
22.95
19.87
3868.74
2182.80
77
232.95
236.08
-1
PBIDT
4101.69
2418.88
70
Net Finance Charges
1296.41
149.47
767
PBDT
2805.28
2269.41
24
767.05
443.16
73
2038.23
1826.25
12
0.00
-31.48
-100
PBT after EO
2038.23
1794.77
14
Tax expense
680.34
545.64
25
1357.89
1249.13
9
41.62
-1.03
-4141
1399.51
1248.10
12
21.28
26.73
Revenue from Operations OPM (%) OP Other income
STOCK DATA BSE Code NSE Symbol Reuters Bloomberg
500300 GRASIM
Depreciation
GRAS.BO
PBT before EO
GRASIM IN
EO
VALUE PARAMETERS 52 W H/L(Rs) Mkt. Cap.(Rs Cr) Latest Equity(Subscribed) Latest Reserve (cons.)
PAT 1299.90/915.00 68522.94 131.52 57230.37
Latest EPS (cons.) -Unit Curr.
62.26
Latest P/E Ratio -cons
16.74
Latest Bookvalue (cons.) -Unit Curr.
872.32
Share of Profit of Associates Profit after Minority Interest and Share of profit of Associates EPS (Rs)
Grasim Industries Ltd. reported its highest quarterly profit in nearly nine years, surpassing estimates.
Latest P/BV - cons
1.19
Consolidated net sales revenue of the company advanced 53% to Rs 16856.70 crore during
Dividend Yield -%
0.59
quarter ended June 2017. Operating margin (OPM) went up by 308 bps to 22.95%. and the
Face Value
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operating profit advanced by 77% at Rs 3868.74 crore. The other income down by 1% to Rs 232.95 crore, thus the PBIDT rose by 70% to Rs 4101.69 crore. The Company interest cost jumped to Rs 1296.41 crore and depreciation rose 76% to Rs 767.05 crore. Thus, the PBT before EO grew by 12% to Rs 2038.23 crore. The Tax Expense
SHARE HOLDING PATTERN (%) Description as on
increased 25% to Rs 680.34 crore. After deducting tax expenses, the PAT before MI and Share
% of Holding 30/06/2018
of profits from Associate rose by 50% to Rs 1092.92 crore. After accounting Minority interest of Rs 1357.89 crore, up 9%, and Share of profits from associates of Rs 41.62 crore, the
Foreign
30.78
Consolidated Net Profit, as a result, surged 12% to Rs 1399.51 crore.
Institutions
15.11
Viscose Business
Govt Holding Non Promoter Corp. Hold.
0 3.61
Promoters
40.09
Public & Others
10.42
The Net Revenue for Q1FY19 at Rs.2,480 Cr. was higher by 35% and EBITDA at Rs.586 Cr. by 68%. The VSF business reported its highest ever quarterly production and sales volume of 134KT and 132KT respectively. The share of the domestic sales in the overall sales rose to 82% in Q1FY19 vis-à-vis 69% in Q1FY18. This was primarily driven by expansion of the domestic market, aided by brand LIVA initiative of the Company. The debottlenecking of the VSF capacity at multiple plant locations is almost complete and is reflected in the production volumes of the current quarter (Q1FY19).
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Grasim is committed to achieve global benchmarks in sustainability through close loop production / European Union Best Available Technologies (EUBAT) technology. The Company’s overseas pulp JVs registered an improvement in operational and financial performance on the back of strong pulp realization and a continued focus on cost optimisation. The recently announced brownfield capacity expansion plan of 219 KTPA at Vilayat is under implementation. Project related work has commenced with the placement of orders for long lead time equipments.
Chemical Business The caustic soda prices in India moderated during the quarter led by temporary softening in global caustic soda prices. The underlying demand from the user industry (Alumina and Textile) continues to remain buoyant. The 146 KTPA Brownfield expansion of caustic soda at Vilayat was commissioned during the quarter. Net Revenue for the quarter rose by 46% YoY to Rs.1,579 Cr. and EBITDA by 103% YoY to Rs.495 Cr. Better realization and higher sales volume were the main drivers. The management focus on increasing the volume of speciality products (chlorine based value added products) continues. The Board has approved the expansion plans for caustic soda and Speciality chemicals at the existing locations entailing a total capex of Rs.1,112 Cr. This would increase caustic soda capacity by 14% to 1,310 KTPA by FY22.
Capex Plan The capex plan of ~ Rs.7,500 Cr. (at standalone level) is under execution for raising capacities in both VSF and Chemical businesses, apart from capex earmarked for maintenance at various plants. A significant portion of our capital expenditure will be funded by internal accruals during FY19-FY21.
Cement Subsidiary - UltraTech UltraTech reported Consolidated Sales Revenue of Rs.9,021 Cr. up 28% (YoY) and EBITDA of Rs.1,763 Cr. in Q1FY19. The consolidated sales volume registered an increase of 29% on YoY basis to 18.01mtpa. The acquisition of the Cement business of Century Textiles and Industries Ltd., in terms of a Scheme of Arrangement is in the process of requisite approvals. On completion of the said acquisition and ongoing capacity expansions, UltraTech’s total capacity will stand augmented to 111.1 Mn MTPA inclusive of its overseas capacity.
Financial Services Subsidiary – Aditya Birla Capital Limited (ABCL) Revenue and Net Profit for Q1FY19 stood at Rs. 2,978 Cr. and Rs.216 Cr., an increase of 32% and 26% YoY respectively. All the key businesses have been the contributors. NBFC lending book grew 23% YoY to Rs.44,408 Cr. The Housing Finance book grew by 1.9x YoY to Rs.9,176 Cr. in Q1FY19. Its Asset Management business ranked No.3 in India with the Average Assets under management up by 19% YoY to Rs.2,67,176 Cr. The business has registered an overall domestic market share of 10.7% with Equity AUM (incl. Alternate and Offshore) at ~ Rs.1,00,000 Cr. in
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Q1FY19. The Life Insurance business reported a 40% growth in the Individual First Year Premium to Rs.227 Cr. It has improved its individual rank by 2 spots to No.71 amongst insurance companies. The Health Insurance business has reported a gross written premium of Rs.76 Crore in Q1FY19. 1Rank and Market share amongst players (Excl. LIC) based on individual FYP: source IRDAI
Outlook The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through brand LIVA and enriching the product mix through a larger share of specialty fibre. However, new capacities likely to come on stream in China may impact the global VSF prices in the near term. The Chemical business is witnessing a healthy growth with the completion of its recent capacity expansion. Further growth is expected from the new capex plan for caustic soda expansion and new product lines for specialty chemicals. In Cement, with the cement industry now in its up-cycle, the demand is expected to be healthy. The key drivers being higher government budget allocation for infrastructure and rural development, increased rural housing demand consequent to increase in Minimum Support Price for kharif crop and pre-election spending. With the additional capacities acquired by the Company through the organic and inorganic route and its rapid rampup, UltraTech is very well placed to participate in the growth of the economy. In Financial Services, ABCL is in the unique position of being able to provide Universal Financial Solutions to meet customers’ money needs for life. ABCL’s focused customercentric approach under a single brand “Aditya Birla Capital” enables it to chart a differentiated and disciplined path to growth.
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