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Grasim Q4 net profit slumps 88.5% to Rs 93.5 crore, sharply below estimate

Analysts had pegged fourth quarter net profit for Grasim Industries at Rs 329 crore.

May 26, 2023 / 03:33 PM IST
Revenue rose marginally by 4.2 percent on year to Rs 6,645.8 crore from Rs 6,376 crore earlier

Revenue rose marginally by 4.2 percent on year to Rs 6,645.8 crore from Rs 6,376 crore earlier

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Grasim Industries posted a net profit of Rs 93.5 crore for the fourth-quarter, reflecting a whopping decline of 88.5 percent year-on-year from Rs 814 crore in the year-ago period. The net profit was also significantly below CNBC-TV18's estimate of Rs 329 crore.

The lower profitability was largely due to high base led by tax write-back in year-ago period and softening of realisations in the chemicals business. The Aditya Birla Group company reported tax expenses at Rs 41.77 crore for Q4FY23, against tax write-back of Rs 406.3 crore in Q4FY22.

"Standalone PAT for the quarter was impacted by the softening of realisations in the chemicals business compared to the elevated levels of Q4 last year and continued global weakness in the VSF (viscose staple fibre) business," Grasim said.

The adjusted profit during the quarter (net of exceptional items, discontinuing operations & tax-writebacks in the respective periods for like-to-like comparison) was down by 74 percent to Rs 94 crore, from Rs 365 crore on year basis, it added.

Revenue rose marginally by 4.2 percent on year to Rs 6,645.8 crore from Rs 6,376 crore earlier, Grasim Industries said in an exchange filing. The topline was slightly ahead of CNBC-TV18's estimate of Rs 6,589 crore.

Segmentwise, VSF business fell moderately by 0.06 percent year-on-year to Rs 3,764 crore and chemicals section registered a 3.6 percent on-year decline at Rs 2,397.5 crore, but others (representing textiles, insulators, paints and B2B E-Commerce) recorded a 24 percent year-on-year growth at Rs 790 crore for the fourther quarter.

The operating numbers, too, were well below analysts' estimates. EBITDA (earnings before interest, tax, depreciation and amortisation) plunged by 43.4 percent year-on-year to Rs 426 crore for March FY23 quarter, with margin declining 540 bps YoY to 6.4 percent.

According to the average of estimates fo analysts polled by CNBC-TV18, EBITDA was expected at Rs 699 crore with margin at 10.6 percent for fourth quarter of FY23.

For the full year, Grasim recorded standalone profit at Rs 2,124 crore, falling 21.2 percent compared to previous financial year. Revenue from operations for year at Rs 26,840 crore was the highest ever, increasing by 28.7 percent over previous fiscal.

Grasim has recommended a dividend of Rs 10 per share for financial year ended March 2023.

The stock fell 0.8 percent to settle at Rs 1,688.3 on the NSE, with volume of 19.38 lakh shares.

Moneycontrol News
first published: May 26, 2023 02:47 pm