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) 2QFY03 2QFY04 Change 1HFY03 1HFY04 Change
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 Tax 1,808 2,284 26.3% 3,288 4,116 25.2%
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* 56.1 88.5 51.0 72.7
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

Growth Volumes Realisations
Cement 8% -4%
VSF -9% 6%
Sponge iron -3% 36%
Caustic soda 6% 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 expenses 2QFY03 2QFY04 Change
Raw materials 2,783 2,907 4%
% of sales 25.0% 24.7%
Employee 788 851 8%
% of sales 7.1% 7.2%
Power 2,099 2,207 5%
% of sales 18.9% 18.8%
Freight 1,188 1,209 2%
% of sales 10.7% 10.3%
Finished goods 21 144 580%
% of sales 0.2% 1.2%
Other costs 1,749 1,749 0%
% of sales 15.7% 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.

GRASIM Announces Quarterly Results (3QFY20); Net Profit Down 6.2% (Quarterly Result Update)

Feb 17, 2020 | Updated on Feb 17, 2020

For the quarter ended December 2019, GRASIM has posted a net profit of Rs 10 bn (down 6.2% YoY). Sales on the other hand came in at Rs 192 bn (up 4.3% YoY). Read on for a complete analysis of GRASIM's quarterly results.

GRASIM 2018-19 Annual Report Analysis (Annual Result Update)

Jul 30, 2019 | Updated on Jul 30, 2019

Here's an analysis of the annual report of GRASIM for 2018-19. It includes a full income statement, balance sheet and cash flow analysis of GRASIM. Also includes updates on the valuation of GRASIM.

GRASIM IND. 2017-18 Annual Report Analysis (Annual Result Update)

Dec 19, 2018 | Updated on Dec 19, 2018

Here's an analysis of the annual report of GRASIM IND. for 2017-18. It includes a full income statement, balance sheet and cash flow analysis of GRASIM IND.. Also includes updates on the valuation of GRASIM IND..

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

I Recommended this Stock over Page Industries because it's Relevant to Doubling Your Income (Profit Hunter)

Sep 7, 2020

Things are not often what they seem in the market and how you can take advantage of this.

The NASDAQ Whale Could Harm Your Portfolio (Fast Profits Daily)

Sep 7, 2020

The discovery of Softbank pushing up prices on the NASDAQ will cause volatility in the market. Stay alert!

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

GRASIM SHARE PRICE


Sep 18, 2020 12:23 PM

TRACK GRASIM

GRASIM - SANGAM INDIA COMPARISON

COMPARE GRASIM WITH

MARKET STATS