Grasim 2QFY04 PAT up 58% YoY - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Grasim 2QFY04 PAT up 58% YoY

Oct 23, 2003

Grasim, the largest cement producer in the country, has reported a 6% growth in its topline for the September quarter, over the previous year. While the operating profits of the company have improved by 5%, the bottomline of the company has grown by nearly 58% on the back of improved operating performance and also a robust 82% increase in other income.

(Rs m)2QFY032QFY04Change1HFY031HFY04Change
Net Sales 11,129 11,772 5.8% 22,484 23,519 4.6%
Other Income 366 665 81.8% 459 876 90.8%
Expenditure 8,628 9,066 5.1% 17,529 18,131 3.4%
Operating Profit (EBDIT) 2,501 2,706 8.2% 4,955 5,388 8.7%
Operating Profit Margin (%)22.5%23.0%22.0%22.9%
Interest 432 403 -6.7% 874 794 -9.2%
Depreciation 628 684 8.9% 1,252 1,354 8.2%
Profit before Tax1,8082,28426.3%3,2884,11625.2%
Extraordinary items (16) 275 (33) 248
Tax (505) (530)5.0%915 1,030 12.6%
Profit after Tax/(Loss) 1,287 2,030 57.7% 2,340 3,334 42.5%
Net profit margin (%)11.6%17.2%10.4%14.2%
No. of Shares 91.7 91.7 91.7 91.7
Diluted Earnings per share*56.188.551.072.7
P/E Ratio 7.9 9.7
(* annualised)

Let us look at how the major divisions of the company performed during 2QFY04.

VSF: Although the VSF division of the company registered a decline in sales of about 9%, higher realisations and cost optimization measures helped the company to offset decline in volumes. The division operated at 110% capacity, up from 107% a year ago. The company is trying hard to develop novel applications for VSF and it has set up R&D facilities for the same

GrowthVolumesRealisations
Cement 8%-4%
VSF-9%6%
Sponge iron-3%36%
Caustic soda6%14%

Cement: The cement division of the company also saw an increase in sales volumes, which improved by 8% YoY. The realisations however suffered on account of the companyís presence in regions of high demand supply mismatch and fell by 4%. Going forward, we expect the cement division to be the growth driver for the company mainly on account of two reasons. First, the industry is growing at a healthy rate of 8-9% and the secondly, the company will also benefit from the economies of scale and improved realisations as a result of the acquisition of L&Tís cement division.

Sponge Iron: Riding on the back of improvement in scrap prices globally, the sponge iron division of the company registered an impressive 36% improvement in realisations in 2QFY04 as compared to the previous year. However, the volumes of the company registered a drop of around 3% on account of lower capacity utilisation of around 64% as compared to 70% in the corresponding period of previous year. The outlook for the division looks bright on account of increase in demand in both domestic and international markets. However, the low availability of natural gas and its pricing remains a cause of concern for the company.

Chemicals: The chemicals division of the company saw both sales volumes as well as realisations improve in 2QFY04. While the volumes of the company improved by around 6%, the realisations registered a rise of around 14%.

Operating expenses2QFY032QFY04Change
Raw materials 2,783 2,907 4%
% of sales25.0%24.7%
Employee 788 851 8%
% of sales7.1%7.2%
Power 2,099 2,207 5%
% of sales18.9%18.8%
Freight 1,188 1,209 2%
% of sales10.7%10.3%
Finished goods 21 144 580%
% of sales0.2%1.2%
Other costs 1,749 1,749 0%
% of sales15.7%14.9%
Total 8,628 9,066 5%

The stock is trading at Rs 700, implying a P/E of 9.7x its annualised 1HFY04 earnings. We will put up a more detailed review of the performance post the companyís analyst meet.

Equitymaster requests your view! Post a comment on "Grasim 2QFY04 PAT up 58% YoY". Click here!

  

More Views on News

GRASIM Announces Quarterly Results (1QFY21); Net Profit Down 65.6% (Quarterly Result Update)

Sep 10, 2020 | Updated on Sep 10, 2020

For the quarter ended June 2020, GRASIM has posted a net profit of Rs 6 bn (down 65.6% YoY). Sales on the other hand came in at Rs 136 bn (down 27.8% YoY). Read on for a complete analysis of GRASIM's quarterly results.

Ramco Cements Q4 Profit Up 51.1% on Higher Sales & Better Cost Control (Views On News)

May 25, 2021

Here's our view on Ramco Cements latest quarterly results.

A Close Look at the Stock of JK Lakshmi Cement (Views On News)

May 21, 2021

A key highlight of the company's Q4 results was its healthy operating performance.

UltraTech Cement Q4 Results: 45% Fall in Net Profit (Views On News)

May 10, 2021

Key takeaways from Ultra Tech Cement Q4FY21 results.

What's Behind ACC's Highest-Ever Revenue in March Quarter? (Company Info)

Apr 20, 2021

Key takeaways from ACC's March quarter (Q1CY21) results.

More Views on News

Most Popular

Hotel Stocks Will Reward Investors (Fast Profits Daily)

Jun 8, 2021

This is why I'm bullish on the hotel and hospitality sector.

My 'Unlock' Investments (Fast Profits Daily)

Jun 11, 2021

The best unlock investments you can make in the market.

The Most Visible Sign of India's Revival is on Two Wheels (Profit Hunter)

Jun 9, 2021

Investing in the best stocks could result in wealth compounding on a massive scale.

How I Discovered a 400-Year-Old Open Secret to Extreme Wealth (Profit Hunter)

Jun 11, 2021

Charlie Munger's open secret about investing success.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

GRASIM SHARE PRICE


Jun 16, 2021 (Close)

TRACK GRASIM

COMPARE GRASIM WITH

MARKET STATS