Aditya Birla Group-owned Grasim Industries reported a consolidated net profit of Rs 1,369.8 crore for the March quarter, virtually unchanged from Rs 1,368.9 crore in the year-ago period. The flat profit was primarily due to disappointing performance in its chemicals business and charges related to the temporary closure of its joint venture company, AV Terrace Bay Inc (AVTB) in Canada.
Grasim recognized an impairment charge of Rs 61.4 crore for the advance against equity in AVTB and created a provision for its estimated exposure of Rs 436 crore. The joint venture firm, which operates in the paper-grade pulp business, has suspended its plant and business operations due to adverse market conditions, as stated in Grasim’s regulatory filing on May 22.
On a standalone basis, Grasim reported a loss of Rs 440.9 crore, a sharp decline from the profit of Rs 93.5 crore in the same quarter last year. Consolidated revenue, however, rose by 12.7 percent year-on-year to Rs 37,727.1 crore.
Despite the mixed performance, Grasim’s board has recommended a dividend of Rs 10 per equity share for FY24. The total outflow on account of the dividend is estimated to be Rs 664 crore, which includes the current paid-up value of partly paid-up shares.
Building Materials and Chemicals Business
Grasim’s building materials business reported a revenue increase of 11.25 percent year-on-year to Rs 20,919 crore, driven by growth in the Cement and B2B E-commerce segments. The business also saw a 24 percent year-on-year rise in EBITDA, reaching Rs 4,150 crore, despite initial losses from its Paints and B2B E-commerce businesses.
In contrast, the chemicals business saw a significant decline, with profit plunging 47 percent year-on-year to Rs 195 crore and revenue decreasing by 13 percent year-on-year to Rs 2,083 crore. The company attributed this drop to an oversupply situation and weak demand for chlorine derivatives.
