Lockdown to impact Q1 performance: Grasim Industries

Grasim Industries, the flagship company of the $48 billion Aditya Birla Group, said its financial performance in the April-June quarter will be significantly impacted due to the coronavirus lockdown and it is reviewing its capital expenditure plans.

However, Grasim Industries, whose subsidiaries include UltraTech Cement and Aditya Birla Capital, said it would be difficult to provide an estimate on the full-year performance of the company.

As per the current assessment, there is no significant impact on the company’s capital and financial resources and other assets, it said.

“The operational and financial performance of the company will be significantly impacted during the Q1FY21 on account of lockdown led demand slowdown. Given the current state of affairs, it would be difficult to provide an estimate on the full-year performance of the company for FY21,” it said in a filing to the exchanges on the impact of the COVID-19 pandemic.

The firm also said it has maintained a “comfortable liquidity position”, both in terms of liquid investments as well as credit available.

However, it is reviewing the capital expenditure (capex) plans for this fiscal.

“We will take a decision on timeline for these capex based on overall economic and demand outlook,” it added.

The company further said its financial position is “strong enough to service all debts” and take care of the working capital requirement.

Regarding the supply chain, it said the initial disruptions have eased now.

“The company maintains an optimum level of inventory which will facilitate restart and scale-up of our plants. With the newly announced guidelines of May 31, 2020, the supply chain situation is expected to improve with material relaxation in lockdown,” it said.

Grasim Industries, a major global producer of viscose staple fibre and the largest chlor-alkali, linen and insulators player in India, said product despatches to customers have been resumed across all operating plants.

The company last week reported a 45.61% increase in consolidated net profit to ₹2,305.19 crore for the March quarter.

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