Turnover rose 12 per cent during the period to Rs 1,189 crore from Rs 1,061.8 crore last year. Gross profit was higher by 44 per cent at Rs 166.4 crore from Rs 116 crore last year. According to the company, "Restructuring of high-cost debts coupled with effective fund-management saw interest costs going down by five per cent from Rs 62.4 crore to Rs 59.3 crore." The company said that higher production and turnover volumes aided by an improved realisation in all of the company's businesses except textiles contributed to Grasim's better performance during the quarter. In a bid to rationalise the manpower, the company had introduced a Voluntary Retirement Scheme and 126 employees opted for it in the third quarter last year.

Employees were paid Rs 2.5 crore, besides normal retirement benefits.Capacity utilisation in viscose stable fibre (VSF) was higher at 99 per cent, compared to 83 per cent in the same quarter the previous year. By running all its VSF business plants at full capacity, it is building up inventories to meet the requirements of its customers during the April-June quarter of the next financial year. Concurrently, the company has taken steps to maximise VSF production at other locations, which account for 45 per cent of overall VSF production.

The company said that building up of inventories during the January-March 2001 quarter will impact operating profits of the fibre business for the fourth quarter, though corresponding gains will be realised in the first quarter of the next financial year, when accumulated stock will get sold. "All the same, earnings of the first quarter of the next financial year for the fibre business will be impacted due to the production cut at its Nagda fibre plant on account of the water problem," the company said. On the cement business, the company said that capacity utilisation during the quarter under review at 97 per cent was almost the same as that of the corresponding period last year. "Improvement in cement prices started materialising in the second quarter in the south, followed by consequent improvement in other markets in November/December, " the company said.