Grasim’s net profit for the quarter rose 8.2 per cent year-on-year. Revenue increased 12.8 per cent. Earnings before interest, tax, depreciation and amortisation increased 5.2 per cent. The ebitda margin contracted 150 basis points to 20.3 per cent.
Grasim is a Aditya Birla Group company has a near-monopoly in viscose staple fiber, a biodegradable cotton-like fiber. The company entered the branded consumer segment with Liva, an apparel brand that uses viscose fiber. Liva clothes are now available in over 3000 stores.
Viscose staple fiber prices have gone up globally as inventory in China nearly halved in the last couple of months, helping in better price realization. Liva has helped the viscose staple fiber segment grow at 12 to 13 per cent.
Grasim merged with Aditya Birla effective July 1 as part of the group restructuring. This business will add close to Rs 5000 crores in revenue and Rs 600 crores in ebitda on an annualised basis. Grasim had a cash surplus of Rs 2900 crores at the end of June. The merger with Aditya Birla Nuvo will add a gross debt of Rs 2000 crores. UltraTech is expected to add another Rs 11,000 crores on a consolidated basis, being a subsidiary of the company.
