Grasim posted excellent numbers for Q4FY22, beating all estimates. Its consolidated net profit came in at Rs.2777 crore, up 62% and this was on a 18% rise in revenue at Rs.28,811 crore. Though increase in costs left a trail on the EBITDA, which was down 10% at Rs.4647 crore. Its Chlor-Alkali business reported highest ever quarterly EBITDA.
The company as at 31st March 2022, is at zero net debt with net cash of Rs.7553 crore.
This apart, during FY22, it successfully commissioned Vilayat VSF Expansion of 600 TPD operating at design capacity; Caustic Soda capacities were ramped up - Balabhadhrampuram (51KTPA), Rehla (91KTPA), CMS at Vilayat (S5OKTPA). The company also launched a new saree brand ‘Navyasa created by LIVA’, a significant opportunity to increase VSF share in a 10-lakh ton saree fibre market.
On the diversification into paint - civil construction has already commenced at two of its plant sites (Panipat and Ludhiana) and is expected to start shortly at Chamarajanagar. It plans to set up a total of six plants across India. The remaining three plants are at different stages of Government approval processes. Market dynamics of the decorative paints sector has changed with new capacities being announced backed by strong growth and outlook. The company has accelerated the execution of ist paint’s capacity of 1,332 MLPA with commissioning of plants to start by Q4FY24. The project cost is likely to be at Rs.10,000 Cr by FY25.
The total Capex spent during FY22 stood at Rs.2,537 Cr, which includes Rs.579 Cr. spent for the Paints Business.
The stock price opened slightly higher at Rs.1405 and rose to an intraday high at Rs.1444 and is currently just about holding on to the green at Rs.1403. Its 52-week high is at Rs.1939.