Aditya Birla Group-owned Grasim Industries share price rose as much as 5.92 percent on Friday’s trading session. Grasim stock surged to ₹2,179 per share on February 9, against previous close at ₹2,057 crore on NSE.
The stock surge was propelled by robust third quarter earnings posted by the company on Thursday, February 8. Profit growth on a comparable basis was propelled by robust demand for the building material, spurred by significant infrastructure investments.
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The company reported its consolidated net profit for the quarter ending December 31, 2023, standing at ₹1514 crore. This represents a substantial growth of 48 percent compared to the net profit of ₹1,024 crore reported in the same period last year.
The company clarified that the net profit figure was adjusted to account for the fair value gain realized by Aditya Birla Capital Limited subsequent to the acquisition of a 9.99 percent stake by ADIA entities in Aditya Birla Health Insurance.
The company’s disclosed net profit experienced a notable decline of 40 percent, amounting to ₹2,515.78 crore, primarily attributed to weaknesses observed in the chemicals segment.
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Grasim Industries, in an official exchange notification, reported consolidated revenue of ₹31,965 crore, marking an increase of 11.6 percent compared to ₹28,638 crore recorded in the corresponding quarter of the previous fiscal year.
On a standalone basis, the company’s revenue reached ₹6,400 crore, showing a modest uptick of 3.2 percent year-on-year, while EBITDA stood at ₹643 crore, demonstrating a healthy growth of 11 percent over the same period.
According to a report by Fitch Ratings in September 2023, India’s cement demand is poised to grow between 6 percent to 8 percent over the forthcoming years.
It is anticipated that cement sales will experience an uptick, driven by heightened government investments in infrastructure, rural development, and increasing demands from the housing sector, the report said.
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However, cement demand experienced a slowdown in December owing to various factors such as elections in four states, flooding in certain southern regions, and a construction ban imposed to mitigate air pollution. Despite a decline in prices during the October-December quarter, cement manufacturers managed to safeguard their margins, benefiting from reduced fuel and raw material costs
The cement manufacturing company’s performance suffered due to a downturn in prices within the chemicals sector in the second quarter. The company attributed this setback to an oversupply of caustic soda in the domestic market and decreased realizations, aligning with a significant drop in global prices. These factors collectively affected the company’s standalone performance adversely.
Grasim stock has gained nearly 19.53 percent in the last six months and 33.78 percent in the last one year.A
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Published: 09 Feb 2024, 04:25 PM IST