Aditya Birla Group flagship Grasim Industries is likely to report a disappointing set of numbers for the first quarter of FY24 compared to the last fiscal. Sequentially, however, profit is expected to show improvement despite a largely subdued revenue.
Standalone net profit for the quarter ended June is seen rising 70 percent on-quarter to Rs 159.37 crore, but is may crash 80 percent on-year because of high base, as per the average estimate of three brokerage firm Moneycontrol covered. Revenue for the quarter under review is likely to decline by about 4 percent QoQ and 12 percent YoY to Rs 6,415.13 crore.
Motilal Oswal Financial Services sees revenue for the Viscose Staple Fibre (VSF) and Chemical segments to decline 13 percent YoY and 21 percent YoY, respectively. VSF volumes are estimated to decline 5 percent YoY, while realisation is likely to drop 8 percent YoY, whereas the Chemical segment’s volumes are likely to rise 5 percent YoY, with a 25 percent YoY decline in realisation in Q1 of FY24, the brokerage firm added.
Grasim Industries' overall sales witnessing a decline is largely because of muted volumes, and weaker realisations in VSF and chemical divisions, Sharekhan said.
Meanwhile, Kotak Institutional Equities predicts a 3.1 percent YoY volume increase in VSF operations and 3.3 percent YoY volume increase in chemical operations. This is due to new capacity expansion, partly mitigated by near-term demand challenges, it said.
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Further, it anticipates an EBITDA (Earnings Before Interest Tax Depreciation and Amortization) of Rs 530 crore, comprising VSF EBITDA of Rs 300 crore (down 40 percent YoY, up 108 percent QoQ) and chemicals EBITDA of Rs 240 crore (down 70 percent YoY, down 36 percent QoQ). These figures, according to Kotak Institutional Equities, reflect reduced prices, moderated by decreased costs in both divisions compared to the previous year, but also include additional losses in the paints division.
Operating margin is seen shrinking dramatically to 8.4 percent in the quarter ended June from 18.2 percent a year ago. Though, the company’s margin stood at 6.4 percent in the previous quarter, according to Kotak Institutional Equities.
On August 9, shares of the company ended flat at Rs 1,844.85 on the BSE.
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