MUMBAI: Sudden increase in the global demand for viscose staple fibre (VSF), coupled with higher demand for knitted fabric, helped Grasim Industries report an increase of 49.75 per cent in its Q2 consolidated net profit at Rs 620 crore compared with Rs 414 crore for the same period last year.
The rise in VSF demand based on comfort fabric has enabled the company to post a record high operating profit of Rs 316 crore, up 81 per cent from the corresponding quarter last year from this segment alone. The company exports about 30 to 35 per cent of its VSF production. The rupee appreciation did not affect the margins in VSF but it was offset by import of VSF pulp.
The consolidated net revenue increased by 25 per cent to Rs 3,973 crore from Rs 3,186 crore in the same period last year. The turnover of chemical business was reported at Rs 108 crore and sponge iron at Rs 209 crore.
Grasim has drawn up a capital expenditure programme of Rs 10,000 crore across all its businesses. The company plans to invest about Rs 4,085 crore in its cement business, which envisages expansion of its capacity by 10.2 million tonnes at a cost of Rs 3,480 crore, setting up of two new thermal power plants of 75 MW each and 27 RMC plants in different locations across the country.
The company has lined up a Rs 692-crore capacity expansion programme for its VSF division, apart from a Rs 840-crore Greenfield facility at Vilayat (Gujarat) and Rs 217-crore expansion of its Harihar and Khrach units.