Grasim posts 42 pc jump in net profit

Grasim posts 42 pc jump in net profit
ENS ECONOMIC BUREAU

MUMBAI, APRIL 28: Aditya Birla group company, Grasim Industries Ltd, has posted a 42 per cent rise in its net profit to Rs 233 crore during the financial year ended March 2000 as against Rs 164 crore last year. The turnover for the year under review was at Rs 4,273 crore, up 14 per cent as against Rs 3,757 crore in the previous year.

Unveiling the company's annual performance, chief financial officer DD Rathi said said Grasim has successfully commissioned a new 0.93 mn tn per annum cement plant at Reddipalayam in Tamil Nadu at a cost of Rs 315 crore. "With the economy on the upturn and increased focus on infrastructure and housing sectors, the new plant should augur well for the company's market share in the southern states of Tamil Nadu and Kerala," he said.

The board of the company has announced a final dividend of 10 per cent (Rs 1 per share), thus taking the total dividend for the year to 70 per cent against 67.5 per cent paid last year. The dividend pay-out will absorb Rs 64.17 crore. Besides, the company will bear a corporate tax on dividend amounting to Rs 8.07 crore, making the total outgo to Rs 72.24 crore against Rs 62.65 crore last year.

``The reduction in financing cost through restructuring of high cost debts, effective fund management and savings in operating costs resulting from ongoing modernisation efforts, upgradation of plants and energy optimisation were among the many reasons for our excellent performance during the year,'' Rathi said. With a view to rationalise its manpower, the company has paid Rs 18 crore to 854 persons who had opted for voluntary retirement scheme.

The sales volume of the cement business clocked an excellent growth of 43 per cent over the previous year with the capacity utilisation at its peak at 102 per cent against 84 per cent achieved in the previous year. Not to be left behind, VSF sales volume registered an impressive 17 per cent growth and the production was up 14 per cent, however the realisation was lower during the period due to severe price competition. The sponge iron division achieved highest ever production of 7.09 lakh mt, a growth of 6 per cent over previous year. The sales volume was significantly higher by 45 per cent at 8.23 lakh mt, indicating an excellent demand from the market.

To push up the volume of value-added products further, Rathi said the company has finalised plans to set up four ready-mix concrete plants at an estimated cost of Rs 32 crore and added the projects which is expected to be completed in next one and a half year's time will be located near Hyderabad or Haryana.

Elaborating on the future investments of the company, Grasim President Shailendra K Jain said "Grasim will not make any additional investments in the sponge iron businesses and will set focus more on its core businesses such as cement and ciscose staple fibre (VSF). However, this doesn't effectively mean that we have any plans to exit from the sponge iron businesses, where the company enjoys a 90 per cent market share."