The Aditya Birla flagship company, “Grasim Industries” for the first quarter ended June 30, 2008, has reported a flat growth 0.49 percent rise in net profit at Rs 514 crore. In the same period last year, it had 512 crore of net profit. The total income of the company saw a rise of 6.84 percent which came to Rs 2,674 this quarter while during the same period last year it had the total income of Rs 2,593 crore.

The minority shares of the company were marginally down by one percent from Rs 120 crore to Rs 672 crore. On the other hand income increased nine percent to Rs 4,524 crore.

The company was mute regarding the performance of the Viscose Staple Fibre (VSF) business during the quarter. The company was forced to look for substitutes due to high prices of VSF, besides the slowdown in the economy. The increase in the prices of sulphur and other key inputs such as pulp and caustic really affected and depressed the margins of the company.

The company has reported, “Margins are likely to remain under pressure in the short to medium term, owing to escalating input prices. The demand for VSF is expected to remain subdued in the short term until the inventory in the pipeline gets liquidated and re-substitution sets in with increasing prices of cotton and polyester staple fibre.”