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... ... @@ -4,7 +4,7 @@ 4 4 5 5 = Overview = 6 6 7 -Grasim Industries Limited, a flagship company of the US$ 48.3 Billion Aditya Birla Group, ranks amongst the top publicly listed companies in India. Incorporated in 1947, it started as a textiles manufacturer in India. Today, it has evolved into a leading diversified player with leadership presence across many sectors. It is a leading global producer of Viscose Staple Fibre, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India’s largest cement producer and a leading diversified financial services player. At Grasim, there is an endeavour to create sustainable value for 21,000+ employees, 230,000+ shareholders, society and customers. It has a consolidated net revenue of over US$ 10 Billion and an EBITDA of over US$ 1.8 Billion in FY 2019.{{footnote}}https://www.grasim.com/about-us/who-we-are{{/footnote}} 7 +Grasim Industries Limited, (GRASIM) a flagship company of the US$ 48.3 Billion Aditya Birla Group, ranks amongst the top publicly listed companies in India. Incorporated in 1947, it started as a textiles manufacturer in India. Today, it has evolved into a leading diversified player with leadership presence across many sectors. It is a leading global producer of Viscose Staple Fibre, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India’s largest cement producer and a leading diversified financial services player. At Grasim, there is an endeavour to create sustainable value for 21,000+ employees, 230,000+ shareholders, society and customers. It has a consolidated net revenue of over US$ 10 Billion and an EBITDA of over US$ 1.8 Billion in FY 2019.{{footnote}}https://www.grasim.com/about-us/who-we-are{{/footnote}} 8 8 9 9 = Business Segment = 10 10 ... ... @@ -72,40 +72,24 @@ 72 72 73 73 = Business Overview = 74 74 75 -Viscose 75 +== Viscose == 76 76 77 -"VSF demand in India witnessed a double digit growth for the second consecutive year. Grasim has been at the forefront of driving the VSF consumption in India with the Launch of LIVA in 2014. In FY19 the Company introduced Livaeco and Liva Home as an extension of the brand LIVA. VSF demand in India is expected to maintain its growth momentum and witness a high single digit growth for the next 2-3 years." 77 +"VSF demand in India witnessed a double digit growth for the second consecutive year. Grasim has been at the forefront of driving the VSF consumption in India with the Launch of LIVA in 2014. In FY19 the Company introduced Livaeco and Liva Home as an extension of the brand LIVA. VSF demand in India is expected to maintain its growth momentum and witness a high single digit growth for the next 2-3 years."{{footnote}}https://www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf{{/footnote}} 78 78 79 -[[https:~~/~~/www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf>>url:https://www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf]] 80 - 81 81 In FY19 ~~1 MTPA of capacity was added by VSF players in Asia taking the overall capacity to 7 MTPA. This is expected to create a demand supply imbalance in the shorter time frame. 82 82 83 83 VFY sales volume has increased substantially during the current year led by acquisitions of rights to operate and manage Century Rayon by the Company effective from 1st February 2018. 84 84 85 - 86 86 During FY19 prices of Chinese VSF declined. On the other hand, global cotton and polyester prices witnessed an increase. In India, cotton prices experienced a double digit price increase owing to lower domestic production, depletion in the cotton reserves of China, and hike in the MSP (Minimum Support Price) of Indian cotton crop. Polyester prices globally have maintained an upward trend due to a spike in the crude oil prices. 87 87 85 +== Chemicals == 88 88 89 -Outlook 90 - 91 -The VSF business is slated to grow vigorously, expanding the market in India by partnering with the textile value chain. It will achieve better customer connect through its brand LIVA and related products, through a larger share of specialty fibre. VSF continues to be the fastest growing textile fibre globally. However, new capacities recently commissioned in Asia may create temporary demand supply mismatch and resultant pressure on prices. 92 - 93 -The global demand for VSF is likely to grow at a CAGR of 6-7% over the next 2-3 years, tad higher than the growth of competing fibres like cotton and polyester. The Asia-Pacific region is witnessing a healthy growth in the demand for this product. This is due to its special natural attributes and increased popularity in countries like India and China, which make it “a preferred fibre of choice” 94 - 95 - 96 -Chemicals 97 - 98 98 The global prices of caustic soda were volatile during the year led by multiple factors like: 99 99 100 -• 89 +* Closure of alumina refinery in South America 90 +* There were limited environment related shutdown in China during the winter months to control pollution level and 91 +* Mandatory adherence to BIS guidelines in India. 101 101 102 -Closure of alumina refinery in South America 103 - 104 -There were limited environment related shutdown in China during the winter months to control pollution level and 105 - 106 -Mandatory adherence to BIS guidelines in India. 107 - 108 - 109 109 In India, the prices remained firm during the year driven by stable demand conditions and slowdown in imports. 110 110 111 111 Domestic consumption of caustic soda is expected to increase by 2-3% over the medium term on account of a strong demand from key consuming sectors such as textile, alumina, pulp and paper, and chemicals industries. ... ... @@ -112,17 +112,10 @@ 112 112 113 113 The Company achieved a new milestone of 1 Million Tonne Sales of Caustic Soda this year, the first company in the Country to attain this record. 114 114 115 - 116 116 Over the years, the demand for chlorine remained firm with prices maintaining a stable trend. The Company is a global leader in the chlorine Value-Added Products (VAP) such as AICI3 and stable bleaching powder. In India, the company hold a leadership position in CP (ChlroParafin), PAC (Poly Aluminium Chloride) and PA (Phosphoric Acid). 117 117 101 +== Textiles == 118 118 119 -Outlook 120 - 121 -The Chemical business is witnessing expansion in both Chlor-alkali and specialty chemicals. The recent acquisition of Chlor-alkali business of KPR Industries Limited (plant under construction) is aimed at increasing the market share in the Eastern region of India, a caustic consumption hub. This, coupled with ongoing brownfield expansion projects at other sites and new product lines for specialty chemicals will lead to an upward swing in the business in the near future. 122 - 123 - 124 -Textiles 125 - 126 126 Grasim’s textiles business has Linen and Wool as the popular product lines. Grasim Textiles business for FY 2018-19, reported a Revenue of ` 1,501 Crore and EBITDA of ` 139 Crore. 127 127 128 128 The company's Linen business maintained its leadership in the Linen Market with ~~45% market share in linen fabric (Pure Linen category) and ~~45% in linen yarn. The retail arm of the business, under the brand “Linen Club” is one of the largest single brand franchise network in India. It added 28 new ‘Linen Club’ EBOs, during FY 2018-19, with a total count of 200 EBOs. Besides fabrics, Linen Club Stores also offer wide range of Linen Apparel. Further, during the year, linen business ventured into intimate blend fabrics and apparels by launching two new brands “Mazury” and “Cavallo” respectively. Cavallo is supplied through E-Commerce channels. ... ... @@ -133,18 +133,14 @@ 133 133 134 134 Grasim has brands rights for the “SOKTAS”, “Giza House” and “Excellence by SOKTAS” brands in key territories including India, Bangladesh and Nepal. 135 135 136 - Thegeneral business outlook remains positive in viewof the overalldemand condition.113 +== Insulators == 137 137 138 - 139 -Insulators 140 - 141 141 The demand growth for insulator industry is being driven by power generation, transmission and distribution. The business generated Revenue of ` 434 Crore and EBITDA of ` 22 Crore for FY 2018-19. 142 142 143 143 The Insulator industry may continue to remain subdued due to lack of investment in the power sector in the Country. 144 144 119 +== UltraTech Cement Ltd. (A subsidiary of the Company) == 145 145 146 -UltraTech Cement Ltd. (A subsidiary of the Company) 147 - 148 148 India’s cement sector witnessed an encouraging double digit demand growth in FY19 highest since FY10. India’s cement industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. The demand growth was driven by Infrastructure projects, low cost housing and performance of the Industrial and commercial sector. The overall demand phase is expected to maintain positive momentum in the months ahead. Increase in demand will facilitate greater capacity utilization. 149 149 150 150 UltraTech was a beneficiary of the strong demand growth. The consolidated sales volume registered an increase of 17% on YoY basis to ~~76mtpa (FY19). The Consolidated Net Revenue in FY19 witnessed a growth of 21% to ` 37,379 Crore and EBITDA increased by 7% to ` 7,226 Crore. ... ... @@ -151,9 +151,8 @@ 151 151 152 152 The Board of Directors of UltraTech had approved a Scheme of Demerger amongst Century Textiles and Industries Limited (Century) and UltraTech and their respective shareholders and creditors (the Scheme). In terms of the Scheme, Century would demerge its cement business into UltraTech. 153 153 127 +== Aditya Birla Capital Ltd. (A subsidiary of the Company) == 154 154 155 -Aditya Birla Capital Ltd. (A subsidiary of the Company) 156 - 157 157 The Aditya Birla Capital reported a strong Financial Performance. The Revenue and Net Profit after Tax for FY19 increased to ` 15,032 Crore and ` 566 Crore up by 65% and 37%. 158 158 159 159 The NBFC Lending book (Including housing finance) expanded 23% YoY to ` 63,119 Crore (FY19) The Average Assets Under Management at ` 2,65,109 Crore (FY19) is up 6% YoY. ... ... @@ -162,20 +162,14 @@ 162 162 163 163 In the Health Insurance business, Gross written premium increased to ` 497 Crore (FY19), almost doubled as compared to the previous year. 164 164 137 += Financial Highlights = 165 165 166 -Financial Highlights 167 - 168 - 169 169 On February 10, 2020; Grasim Industries Limited announced its unaudited financial results for the quarter and Nine months ended 31st December 2019 170 170 141 +Consolidated Revenue for the nine months ended 31st December 2019 stood at `57,724 Cr. recording a growth of 5%. Consolidated PBT at ` 6,387 Cr. recorded a growth of 23% YoY. Revenue and EBITDA for the quarter, however, remained largely flat.{{footnote}}https://www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf{{/footnote}} 171 171 172 - ConsolidatedRevenue for the nine monthsended 31st December 2019 stood at `57,724 Cr. recording a growth of 5%. ConsolidatedPBT at ` 6,387 Cr. recorded a growth of 23% YoY. Revenue and EBITDA for the quarter, however, remainedlargely flat.143 +== Viscose Business == 173 173 174 -[[https:~~/~~/www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf>>url:https://www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf]] 175 - 176 - 177 -Viscose Business 178 - 179 179 In the VSF business, production and sales volume recorded an increase of 5% and 3% YoY to 148KT and 138KT respectively. The Net Revenue for the viscose segment (including VFY) stood at `2,194 Cr. and EBITDA for the quarter stood at `256 Cr. 180 180 181 181 This quarter’s profitability was impacted primarily by the drop in the domestic VSF prices, on the back of weakening global prices owing to large supply surplus triggered by new capacity additions in Asia in last one year and global demand slowdown caused by U.S-China trade war. The reduction in the domestic VSF prices was accelerated to counter surge in cheap yarn imports from China/Indonesia which impacted viability of Indian spinners. The domestic VSF prices may witness some improvement in the near term with improving sentiments post phase-1 of US-China trade deal and near-term global supply constraints from China. ... ... @@ -186,25 +186,20 @@ 186 186 187 187 The 219 KTPA Vilayat Brownfield capacity expansion is progressing as per schedule and expected to be commissioned by FY21. 188 188 155 +== Chemical Business == 189 189 190 -Chemical Business 191 - 192 192 The Net Revenue for Q3FY20 stood at `1,362 Cr. and EBITDA stood at `185 Cr. Global caustic soda prices were soft during the quarter. Domestic caustic prices were impacted due to increased domestic capacity, rise in imports and weak demand. 193 193 194 - 195 195 Caustic Soda sales and production volume for Q3FY20 stood at 257KT and 261KT respectively. The speciality chemicals (Value added chlorine product) profitability was impacted by slowdown in demand. The share of EBITDA from Speciality chemicals including Epoxy resins stood at ~~1/3 of Chemical business. 196 196 197 - 198 198 The Caustic Soda capacity expansion projects at Rehla, Vilayat and Balabhadrapuram are at different stages of execution with expansion of specialty chemical products too 199 199 163 +== Capex Plan == 200 200 201 -Capex Plan 202 - 203 203 The total capex plan of ~~`7,800 Cr. (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 is expected to be incurred over three years period from FY20-FY22. 204 204 167 +== Cement Subsidiary - UltraTech == 205 205 206 -Cement Subsidiary - UltraTech 207 - 208 208 UltraTech reported Consolidated Revenue of `10,354 Cr. and EBITDA of `2,141 Cr. in Q3FY20 up 25%YoY. PAT stood higher at `712 Cr. up 80% YoY. The consolidated sales volume stood at ~~20.90 MTPA. 209 209 210 210 The acquired plants of Century ramped up production touching a capacity utilization of 79% in Dec-19. Brand and operational integration is underway and is expected to reach 84% by Q2FY21. ... ... @@ -213,9 +213,8 @@ 213 213 214 214 UltraTech Nathdwara Cement Limited is fully integrated with the UltraTech systems and processes. The plants have achieved optimal efficiencies and are PBT accretive. 215 215 177 +== Financial Services Subsidiary – ABCL == 216 216 217 -Financial Services Subsidiary – Aditya Birla Capital Limited (ABCL) 218 - 219 219 The Revenue and Net profit after minority interest for Q3FY20 (as reported by ABCL) are at `4,326 Cr. and `250 Cr. up by 14% and 17% respectively. 220 220 221 221 The Overall lending book (NBFC and Housing Finance) stood at `60,123 Cr. (Q3FY20). ... ... @@ -228,9 +228,8 @@ 228 228 229 229 In the Health Insurance business, Gross written premium increased to `547 Cr. (9MFY20), up 73% YoY. 230 230 191 +== Outlook == 231 231 232 -Outlook 233 - 234 234 The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through its brand LIVA and extension into new categories. VSF continues to be the fastest growing textile fibre globally. The economic standstill in China and improved sentiment post phase-1 of U.S China trade war may lead to some improvement in VSF prices in near term, however the underlying supply-demand imbalance is likely to continue for some time. 235 235 236 236 The Chemical business is under an expansion mode for both chlor-alkali and specialty chemicals. The ongoing expansion projects at different sites and new product lines for specialty chemicals will enable growth of the business. Simultaneously, the business is focusing in reducing cost of power (a key input) by optimizing power mix and increasing share of renewable power. ... ... @@ -241,8 +241,6 @@ 241 241 242 242 Grasim is incurring capex to increase capacities across its key businesses and is potentially well positioned to leverage the next phase of the economic growth. 243 243 203 += References = 244 244 245 - 246 -References 247 - 248 248 {{putFootnotes/}}