MUMBAI, November 4: As expected, Grasim Industries Ltd, the flagship of the Aditya Birla group, has come out with lower profits for the half-year ended September 1997. The net profit of the company dropped by 15 per cent to Rs 125.26 crore from Rs 147.44 crore in the same period of last year.

The company, however, achieved a higher operating profit by 2.1 per cent at Rs 305.04 crore compared to Rs 298.84 crore. This was due to higher volumes in viscose staple fibre (VSF), cement and sponge iron despite lower realisation coupled with increase in cost of government controlled inputs.

Grasim's net sales turnover at Rs 1,765.69 crore was up by 19.1 per cent compared to Rs 1,483.02 crore in the same period of last year. The gross profit declined by 8.7 per cent to Rs 220.92 crore from Rs 241.97 crore. The provision for depreciation is at Rs 74.41 crore (Rs 65.28 crore) and for taxation at Rs 21.25 crore (Rs 29.25 crore). As soon as the company announced lower profits today, the Grasim share plunged to a 52-week low of Rs 300. It subsequently recovered to close at Rs 314.75 on the BSE.

The company reported higher production in all major product categories. However, sponge iron production was down mainly due to restrictions in gas supply. To overcome this problem, a facility for the use of naptha as an alternative fuel upto 26 per cent has been set up, the company said.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.