Grasim Industries Ltd, a subsidiary of Aditya Birla Group, witnessed its quarterly profit plummet by 56% - the fourth consecutive quarterly decline. The company faced challenges from feeble chemicals prices and a textiles industry slump.

Standalone profit decline

The standalone net profit for the quarter ended June 30 fell to ₹3.55 billion ($42.9 million), a significant drop from ₹8.09 billion in the same period last year.

Chemicals price impact

The company's second-largest business, chemicals, experienced a 21.5% reduction in revenue due to lowered prices, including those of caustic soda. Grasim attributed this to an oversupply and weak demand, leading to a 46% decline in international caustic soda spot prices.

Textiles business struggle

Grasim's primary business, the viscose staple fibre (VSF) segment, faced sluggish demand and flat material prices. The VSF business's revenue dropped by 16.7%, marking the third consecutive quarterly decline.

Overall revenue and future plans

The company's revenue from operations fell by 14% to ₹62.38 billion. Grasim stated that the global textile value chain remained slow, with certain markets showing slight improvements.

Focused investments

For fiscal year 2024, the company allocated ₹57.91 billion for capital expenditure (capex). Out of this, ₹43.42 billion will be utilized to establish paints and business-to-business e-commerce ventures.

Last month, Grasim's subsidiary Ultratech Cement reported positive Q1 results, while Aditya Birla Capital, its diversified financial services arm, also saw profit growth.