For the third quarter Grasim’s profit fell by 50 per cent. The company was hurt by a slowdown in demand for some products it sells, including a key material used in various kinds of clothes.

The profitability of the company’s viscose staple fiber business, which comprises over half its standalone revenue, was impacted due to lower exports, higher input costs and lower utilisation levels. Revenue for the segment fell by nearly five percent. However demand for caustic soda--a key product of Grasim’s chemicals segment--remained robust. The company’s chemicals business is its second largest division. Total revenue from operations rose by seven percent during the quarter. However Grasim struggled with increasing expenses, led by an almost 18 per cent increase in cost for power and fuel on the back of rising global coal prices.

Grasim, a flagship company of the Aditya Birla Group, produces viscose staple fiber, viscose filament yarn, advanced material, linen yarn, and fabrics. The business is working on plans to add new chlorine value-added products in the portfolio to increase the chlorine integration levels.

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.