Consolidated Revenue for Q2FY21 stood at 18,400 crore unchanged Y-o-Y basis, rising 35 per cent sequentially. Consolidated EBITDA for Q2FY21 increased to 3,660 crore up 40 per cent Q-o-Q and 15 per cent Y-o-Y respectively.

The consolidated PAT from continuing operations (before Exceptional Items and before Minority Interest) for Q2FY21 stood at 1,518 crore recording an increase of 94 per cent on sequential basis.

Standalone performance witnessed a remarkable improvement, with Revenue and EBITDA rising sequentially to 3,438 crore and 680 crore in Q2FY21 from 1,940 crore and (46 crore) in Q1FY21. PAT increased to 360 crore.

The economy has been on the recovery path post relaxation of COVID-19 induced lockdown. It has been a resilient September quarter for Grasim due to strong recovery in demand and the Government working relentlessly to support home grown businesses by injecting doses of fiscal and monetary stimulus on a timely basis.

Viscose Business

The textile markets in India and overseas are witnessing a turnaround with COVID-19 related restrictions being phased out by the respective Governments. The unlock measures across the country have led to a steady increase in consumer spending, which is expected to get further uplifted with the onset of festive season. The export of Indian textile products by value has also recovered to near pre COVID-19 levels post a sharp downturn in Q1FY21.

The Viscose business has been on the recovery path since the end of Q1FY21 with operating rates rising month on month. The capacity utilization of the VSF business touched 88 per cent in Q2FY21 from 26 per cent in Q1FY21and recorded near 100 per cent capacity utilisation exit Q2. The VFY business has also recorded a significant improvement in the operational performance in Q2FY21.

The Chinese VSF industry is showing signs of improvement with a consistent uptick in the operating rates led by resurgence in local demand, lower inventory levels and improvement in realization, all pointing towards a recovery in demand. The steadily widening gap between cotton and Viscose prices has also led to a shift in favour of Viscose, thus contributing to further growth in demand for viscose.

Chemical Business

In the Chemical business, the chlorine derivatives products demand remained strong driven by higher sales of Hygiene products and Disinfectants, Organic intermediates, Agrochemicals and CP segment.

The Caustic Soda production staged a strong recovery in volumes during the quarter, the capacity utilisation improved to 80 per cent in Q2FY21 from 49 per cent in Q1FY21 with end use industries also witnessing recovery in their demand.

The excess supply of caustic soda has resulted in prices weakening to below $250 level (South East Asia). The Net Revenue for Q2FY21 stood at 1,126 crore and EBITDA stood at 187 Crore. The EBITDA for chlorine derivatives witnessed a double-digit growth sequentially.

Sustainability

Grasim Industries Limited has been ranked as one of India's Top 10 companies for sustainability and corporate social responsibility 2020 by ET and Futurescape 7th Responsible Business Rankings.

Grasim was also ranked among the top 10 companies in India for CSR and Sustainability by the CSR Journal of India.

The VSF business was ranked No.1 globally in Canopy's Hot Button Report 2020 which ranks global viscose producers on sustainable forestry practices/wood sourcing, next generation solutions in alternate feed stocks and supply chain traceability.

Capex Plan

Given the improvement in the business sentiment and the strong financial performance in the quarter, the company has received additional capex approval of 237 Crore for Chemical and VFY business. With this additional capex, the Board has approved capex spend of 1,852 crore for FY21. The capex includes raising capacities in VSF and Chemicals in FY22, apart from ongoing modernisation capex at various plants.

Cautionary Statement

Statements in this 'Press Release' describing the Company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities law and regulations. Actual results could differ materially from those express or implied. Important factors that could make a difference to the Company's operations include global and Indian demand supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.

Contact:

Tel: +91-22-6652-5000

Email: sandeep.gurumurthi@adityabirla.com

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