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Grasim: Higher volumes and realisations boost profits - Views on News from Equitymaster
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  • Feb 4, 2016 - Grasim: Higher volumes and realisations boost profits

Grasim: Higher volumes and realisations boost profits
Feb 4, 2016

Grasim Industries has announced its financial results for the quarter ended December 2015. During the quarter, the company's standalone sales and net profit report a sharp jump of 49.7% YoY and 177.9% YoY respectively. Here is our analysis of the results:

Performance summary

  • Standalone revenues increase by 49.7% YoY during 3QFY16 driven by higher volume as well as realizations in both VSF and chemical segment.
  • The company's leadership in the chemical segment strengthened with completion of Aditya Birla Chemicals (India) merger with Grasim.
  • Operating profits increase by 159.8% YoY; operating margins expand from 10.7% in 3QFY15 to 18.6% in 3QFY16.
  • At the bottomline level, profits zoom up by 177.9% YoY during the quarter driven by strong operating performance.

Standalone financial performance

(Rs m) 3QFY15 3QFY16 Change 9MFY15 9MFY16 Change
Net sales 15,441 23,120 49.7% 45,508 63,578 39.7%
Expenditure 13,790 18,830 36.5% 40,636 53,263 31.1%
Operating profit (EBITDA) 1,651 4,289 159.8% 4,872 10,315 111.7%
EBITDA margin 10.7% 18.6%   10.7% 16.2%  
Other income 468 550 17.6% 3,460 3,356 -3.0%
Depreciation 629 1,231 95.8% 1,782 3,184 78.7%
Finance costs 116 396 240.4% 263 1,206 359.5%
Profit before tax & exceptional items 1,374 3,213 133.9% 6,287 9,281 47.6%
Exceptional gain/ (loss) - -   - -  
Profit before tax 1,374 3,213 133.9% 6,287 9,281 47.6%
Tax 437 609 39.4% 1,298 1,834 41.3%
Effective tax rate 31.8% 19.0%   20.6% 19.8%  
Net Profit 937 2,604 177.9% 4,989 7,447 49.3%
Net profit margin 6.1% 11.3%   11.0% 11.7%  
No of shares (m)       91.8 91.9  
Diluted EPS (Rs)*         84.4  
P/E (times)*         40.5  

*trailing twelve month earnings

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