For the second quarter Grasim’s standalone net profit fell by 1.5 per cent. Revenue from operations rose nearly 37 per cent. Earnings before interest, taxes, depreciation and amortization (ebitda) for the quarter increased 19.4 per cent but margins contracted 206 basis points to 14 per cent. The fall in margins was due to a sharp rise in input costs and other expenses.

Revenue from the viscose staple fiber business increased 30 per cent while the chemicals business reported a 66 per cent growth in sales. Caustic soda sales volume rose 17 per cent. Captive consumption of chlorine increased during the quarter witnessing double-digit growth on a year on year basis. The business is working on plans to add new chlorine value-added products in the portfolio to increase the chlorine integration levels.

Viscose staple fiber sales volume for the quarter rose ten per cent year on year even though they were 14 per cent down on a quarter on quarter basis due to demand conditions coupled with cheaper imports from Indonesia and China.

The India-centric demand for viscose staple fiber remained largely intact but value chain partners for the global markets have started witnessing the impact of recessionary conditions. China’s average viscose staple fiber operating rates reduced to 66 per cent in the second quarter.