Grasim’s net profit declines 30.6 pc

MUMBAI, OCT 30: The Aditya Birla flagship, Grasim Industries, has reported a 30.6 per cent decline in net profit in the first six months of 1998-99 at Rs 86.95 crore from Rs 125.26 crore in the same period of last year. Net sales dropped marginally to Rs 1,761.48 crore against Rs 1,765.69 crore in the first half of last year. Sales of cement and sponge iron has been lower in the second quarter on account of the continued slowdown in the economy. Sales of cement dropped 7.3 per cent, while that of sponge iron declined by 37.3 per cent.

With price realisation being lower in most of the commodity businesses that the company is in, margins have been under pressure. The company said that the net profit has been lower due to lower other income, which declined to Rs 36.05 crore from Rs 51.11 crore, and higher depreciation on account of commissioning of the new viscose staple fibre plant.

Depreciation jumped to Rs 90.63 crore from Rs 74.41 crore. Interest burden has been reduced to Rs 129.47 crore from Rs135.23 crore in the same period last year. Grasim has provided for a tax of Rs 13.5 crore in the first half against Rs 21.25 crore in the first half of 1997-98. In the first half, production and sales of both cement and sponge declined substantially.