Grasim Industries Q2 Results FY2023, Net profit at Rs.1097 crores

On 14th November 2022, Grasim Industries announced its quarterly results for the second quarter of FY2023.
 

Q2FY23 Performance updates:

- Revenue from operations increased by 22% YoY to Rs 27486 crore
- The company’s EBITDA stood at Rs. 3783 crores.
- Net Profit stood at Rs. 1097 crores.

Business Highlights:

- In the Viscose Business, the global MMCF industry witnessed a demand decline in Q2FY23 from the developed global economies due to high inflation-led recessionary market conditions. 
- China’s average VSF operating rates reduced to 66% in Q2FY23 from 76% in Q1FY23 due to continued COVID-induced lockdowns in different cities and global demand decline.
- The India-centric demand for VSF remained largely intact, but value chain partners for the global markets have started witnessing the impact of recessionary conditions. Nevertheless, VSF sales volume for the quarter at 170KT was up 10% on a YoY basis, though 14% down on a QoQ basis due to demand conditions coupled with cheaper imports from Indonesia and China.
- In the chemical business, caustic soda sales volume was up 17% YoY to 296KT in Q2FY23 on the back of new capacities commissioned in H2 last year (Rehla and BB Puram). Chlorine VAPs sales volume was up by 19% YoY. 
- Global caustic soda prices have softened this quarter compared to Q1FY23, mainly due to the easing of global supply chain conditions. This has led to sequentially lower ECU realisation in domestic markets too. 
- Captive consumption of chlorine increased during the quarter witnessing double-digit growth on a YoY basis on the back of our new VAP facility commissioned. Chlorine integration stood at 61% this quarter compared to 56% in Q2FY22. 
- Advanced Material business realization continued to normalize after peaking last year. Sales volume was up by 8% YoY, with a rising share of specialty products.
- Paints Business is focused on the timely execution of the plan. The first plant is to be commissioned in Q4FY24, and the remaining plants by FY25 in a phased manner. The construction work is in progress across five locations and will commence at the remaining one location in Q4FY23.
- The B2B E-commerce business plan is under execution for launch by Q2FY24 as scheduled
- The total Capex budgeted for FY23 stood at Rs. 6,720 Crores, including Rs 3,542 Crores for the Paints Business. Against this budgeted amount, the actual spend till H1FY23 is Rs. 1,524 Crores. 
- Additional capex of Rs. 565 Crores has been approved by the board for existing businesses, out of which Rs. 382 Crores is expected to be spent in FY23.