Grasim Industries Ltd's Q4FY19 standalone net profit rises 20.9% yoy to Rs451cr: Misses Estimates

The company’s standalone revenue stood at Rs5,352.27cr, up 16.1% yoy and 1.2% qoq.

May 24, 2019 10:05 IST India Infoline Research Team

Grasim Industries Ltd Q4FY19

Standalone Results Q4FY19: (Rs. in cr)

Q4FY19 YoY (%)
Revenue 5,352.27 16.1
EBITDA 898.57 5.6
EBITDA Margin (%) 16.8 [166]
Net Profit (reported) 451.24 20.9
***EBITDA margin change is bps
Grasim's (Standalone) numbers for Q4FY19 missed estimates on EBITDA and PAT fronts. Revenue for the quarter was up 16.1% yoy to Rs5,352cr, against consensus estimates of Rs5,071cr. EBITDA grew by 5.6% yoy to Rs899cr, against consensus estimates of Rs993cr. EBITDA margin contracted by 166bps yoy to 16.8%. PAT grew by 20.9% yoy to Rs451cr against consensus estimates of Rs655cr.
  • Standalone PAT before exceptional item came in at Rs506cr, down 3.8% yoy.
  • Consolidated revenue (Rs20,965cr) and EBITDA (Rs3,786cr) were up 21% yoy and 27% on yoy basis respectively.
  • VSF
    • The Viscose Business reported net revenue of Rs2,625cr, up 18% yoy with EBITDA at Rs413cr, up 3% yoy. The share of the domestic sales in the overall sales rose to 86% in Q4FY19 from 83% in Q4FY18.
    • The VSF business reported production and sales volume of 130KT and 139KT respectively recording an increase of 15% yoy and 13% yoy respectively.
    • Value added Speciality Fibre line of 16 KTPA capacity based on in-house technology has been commissioned at Kharach in May 2019.
    • The Brownfield capacity expansion plan of 219 KTPA at Vilayat is progressing well with construction work in full swing, scheduled to be commissioned in FY21.
    • The company’s popular VSF brand ‘Liva’ for the VSF business has been extended, to home textile category with launch of “LIVA HOME”.
  • Chemical
    • Chemical segment’s net revenue for the quarter grew 17% yoy to Rs1,688cr with a 5% yoy increase in EBITDA to Rs434cr.
    • For Q4FY19, the production and sales volume of 254KT and 261KT respectively recorded an increase of 16% yoy and 21% yoy respectively.
    • The acquisition of under construction Chlor-Alkali plant in Andhra Pradesh (with a potential capacity of 365 KTPA) for Rs253cr. during the Q4FY19 is aimed at strengthening the operations on the east coast of India, a major Caustic Soda consumption hub.
    • The company is in the process of implementing approved capacity expansion plan from 1,147 KTPA to 1,457 KTPA at multiple locations and the same are in different stages of execution.
  • The total capex plan of Rs6,454cr. (at standalone level) is under execution for raising capacities in both the VSF and Chemical businesses, apart from ongoing modernisation capex at various plants.
  • This capital expenditure will be incurred over FY20-22 and will be majorly funded from internal accruals. The cash profit generated in FY19 is over Rs3,400cr. at standalone level.

Technical View:

Grasim Industries Ltd ended at Rs. 908.30, up by 21.85 points or 2.46% from its previous closing of Rs. 886.45 on the BSE.
The scrip opened at Rs. 890 and touched a high and low of Rs. 914 and Rs. 879.10 respectively. A total of 22,93,968 (NSE+BSE) shares were traded on the counter. The stock traded below its 200 DMA.

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