Grasim Industries Ltd.

Balance Sheet Analysis (FY19)

Roll No. 17-F-339

Treasury Management – Assignment 2

 Grasim Industries Limited
Balance Sheet Analysis
CORPORATE INFORMATION

Grasim Industries Limited (“the Company”) is a limited company incorporated and domiciled in
India. The registered office is at Birlagram, Nagda - 456 331, Dist. Ujjain (M.P.), India. The
Company is a public limited company and its shares are listed on the Bombay Stock Exchange
(BSE), India, and the National Stock Exchange (NSE), India, and the Company’s Global
Depository Receipts are listed on the Luxembourg Stock Exchange.

The Company is engaged primarily in Viscose (Pulp, Fibre and Yarn), Chemicals (Caustic Soda,
Epoxy and allied Chemicals) and others (Insulators, Textiles, Fertilizers and Solar Power
Designing, Engineering Procurement and Commissioning).

Key Performance Highlights of FY 19

 Solid Financial Performance: Revenue Rs. 20,550 Cr. EBITDA Rs. 4,639 Cr. Cash
Profit Rs. 3,457 Cr.
 Caustic Soda sales surpassed one million ton mark in FY19, a first in India by
any Company
 Achieved record sales volume of VSF at 541 KT led by volume growth of 17% YoY
in domestic market
 Launch of LIVAeco and LIVAhome brands for VSF business
 Capex plan of Rs. 6,159 Cr. under implementation for capacity expansion and
modernization in VSF and Chemicals businesses
 Completed two acquisitions in Chemicals and Textile business i.e. Chlor- Alkali
plant and Soktas India Pvt. Ltd.

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Balance Sheet as at 31st March 2019

The company's current liabilities during FY19 stood at Rs 461 billion as compared to Rs 423
billion in FY18, thereby witnessing an increase of 9.0%. Long-term debt stood at Rs 556 billion
as compared to Rs 408 billion during FY18, a growth of 36.3%. Current assets rose 21% and
stood at Rs 487 billion, while fixed assets rose 10% and stood at Rs 524 billion in FY19. Overall,
the total assets and liabilities for FY19 stood at Rs 2,292 billion as against Rs 2,079 billion
during FY18, thereby witnessing a growth of 10%.

Following are some financial ratios explaining balance sheet in depth:

Financial Ratios Mar '19 Mar '18

Current Ratio 0.74 0.81
Quick Ratio 0.71 0.63
Inventory Turnover Ratio 7.01 6.19
Debtors Turnover Ratio 6.75 8.31
Investments Turnover Ratio 7.01 6.19
Fixed Assets Turnover Ratio 1.64 1.39
Total Assets Turnover Ratio 0.47 0.34
Asset Turnover Ratio 0.45 0.49

Working Capital Borrowings are secured by hypothecation of stocks and book debts of the
Company.

Loan of Rs. 345.82 Crore has been availed by the Company under the Special Banking
Arrangement (SBA) of Department of Fertilizer, Government of India, and has been secured

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against subsidy recoverable from the Government of India. As per the arrangement, the loan
will be repaid directly by the Government of India to the Bank and corresponding adjustment
will be made in Subsidies recoverable. Rate of interest is 8.20% per annum, out of which
interest @ 7.78% per annum will be borne by the Government of India.

The Company had available Undrawn Facility of Rs. 488.74 Crore as on 31st March 2019 and
Rs. 403.93 Crore as on 31st March 2018.

Income Statement for FY 2019

Infusion of Surplus Fund:-

Net FCF generation of over Rs. 500 Cr. in FY19 at Standalone level post capex and investment
of over Rs. 2,400 Cr. Where total amount of Capex planned is Rs. 6,454 Cr. (for 3 years)

 For Capacity expansions under execution in core businesses (to be commissioned by FY

21)
 Commissioned 3rd Generation 16 KTPA Specialty Fibre plant using in house Green
technology, in May’19. This will enable entry into newer end use segments with superior
quality offerings
 Acquired Soktas India to enhance the Premium Fabrics capability in Textiles business

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