A

PROJECT REPORT
ON
INDIAN TEXTILE INDUSTRY

MASTER OF MANAGEMENT STUDIES (MMS)

UNIVERSITY OF MUMBAI

SUBMITTED TO
Anjuman-I-Islams Allana Institute of Management Studies
Mumbai-400001.

UNDER THE GUIDANCE OF

PROF.CHINMAY CHOPDE

SUBMITTED BY
DEEPTI HARIOM GUPTA - 13
TANVEER MUKUDAM

- 25

OVERVIEW OF INDIAN TEXTILE INDUSTRY

Background
India Textile Industry is one of the leading textile industries in the world.
Though was predominantly unorganized industry even a few years back, but
the scenario started changing after the economic liberalization of Indian
economy in 1991. The opening up of economy gave the much-needed thrust to
the Indian textile industry, which has now successfully become one of the
largest in the world.
India textile industry largely depends upon the textile manufacturing and export.
It also plays a major role in the economy of the country. India earns about 27%
of its total foreign exchange through textile exports. Further, the textile industry
of India also contributes nearly 14% of the total industrial production of the
country. It also contributes around 3% to the GDP of the country. India textile
industry is also the largest in the country in terms of employment generation. It
not only generates jobs in its own industry, but also opens up scopes for the other
ancillary sectors. India textile industry currently generates employment to more
than 35 million people.
Indian textile industry can be divided into several segments, some of which
can be listed as below:
Cotton Textiles
Silk Textiles
Woolen Textiles
Readymade Garments
Hand-crafted Textiles
Jute and Coir.

CURRENT SCENARIO
The Indian textiles industry, currently estimated at around US $108 billion, is
expected to reach US $ 141 billion by 2021. The industry is the second largest
employer after agriculture, providing direct employment to over 45 million and 60
million people indirectly.
The Indian Textile Industry contributes approximately 5 per cent to GDP, and
14 per cent to overall Index of Industrial Production (IIP).
The Indian textile industry has the potential to grow five-fold over the next ten
years to touch US$ 500 billion mark on the back of growing demand for
polyester fabric, according to a study by Wazir Advisors and PCI Xylenes and
Polyester. The US$ 500 billion market figure consists of domestic sales of US$
315 billion and exports of US$ 185 billion. The current industry size comprises
domestic market of US$ 68 billion and exports of US$ 40 billion, according to
Mr Prashat Agarwal, Managing Director, Wazir Advisors.
Apparel exports from India have registered a growth of 17.6 per cent in the
period AprilSeptember 2014 over the same period in the previous financial
year.

Readymade garments and cotton textiles dominate textile exports

Readymade garments was the largest contributor to total textile and apparel
exports from India in FY15
The segment had a share of 40 per cent in overall textile exports
Cotton and man-made textiles were also major contributors with shares of 31
per cent and 16 per cent, respectively .

The textile and apparel industry can be broadly divided into two segments - yarn
and fibre, and processed fabrics and apparel. India accounts for ~14 per cent of the
world's production of textile fibres and yarns (largest producer of jute, second
largest producer of silk and cotton, and third largest in cellulosic fibre). India has
the highest loom capacity (including hand looms) with 63 per cent of the world's
market share.
The domestic textile and apparel industry in India is estimated to reach US$ 141
billion by 2021 from US$ 67 billion in 2014. Increased penetration of organised
retail, favourable demographics, and rising income levels are likely to drive
demand for textiles.India is the world's second largest exporter of textiles and
clothing.

Textile and apparel exports from India are expected to increase to US$ 82 billion
by 2021 from US$ 40 billion in 2014. Readymade garments remain the largest
contributor to total textile and apparel exports from India. In FY15 the segment
had a share of 40 per cent of all textile and apparel exports. Cotton and man-made
textiles were the other major contributors with shares of 31 per cent and 16 per
cent, respectively.
Rising government focus and favourable policies is leading to growth in the
textiles and clothing industry. Foreign direct investment (FDI) in textile sector
increased to US$ 1,587.8 million in FY15 from US$ 1,424.9 million in FY14.

KEY PROVISIONS OF BUDGET 2O14-15

Allocation of INR 500 Million towards the setting up of a trade facilitation

centre and a crafts museum to develop and promote handloom products and
carry forward the rich tradition of the handlooms of Varanasi.

Allocation of INR 2000 Million towards the proposed setting up of mega

textile clusters at Bareilly, Lucknow, Surat, Kuttch, Bhagalpur and Mysore and
one in Tamil Nadu.

Allocation of INR 300 Million towards the setting up of Hastkala Academy

for the preservation, revival and documentation of the handloom/handicraft
sector in PPP mode in Delhi.

Allocation of INR 500 Million towards the setting up of Pashmina

Promotion Programme (P-3) and a programme for the development of other
crafts of Jammu & Kashmir.

The duty-free entitlement for import of trimmings and embellishments used

by the readymade textile garment sector for manufacture of garments for
exports is being increased from 3% to 5%.

Non-fusible embroidery motifs or prints are being included in the list of

items eligible to be imported duty-free for manufacture of garments for exports.

The list of specified goods required by handicraft manufacturer-exporters is

being expanded by including wire rolls so as to provide customs duty
exemption on import by handicrafts manufacturer-exporters.

Fusible embroidery motifs or prints, anti-theft devices, pin bullets for

packing, plastic tag bullets, metal tabs, bows, ring and slider hand rings are
being included in the list of items eligible to be imported duty-free for
manufacture of handloom made ups or cotton made ups or manmade made ups
for export.

Specified goods imported for use in the manufacture of textile garments for
export are fully exempt from Basic Customs Duty (BCD) and Countervailing
Duty (CVD) subject to conditions that the manufacturer produces an
entitlement certificate from the Apparel Export Promotion Council or from the
Indian Silk Export Promotion Council.

Basic Customs Duty (BCD) on raw materials for manufacture of spandex

yarn viz. polytetramethylene ether glycol and diphenylmethane 4,4 diisocyanate is being reduced from 5% to NIL.

TAX INCENTIVES :

R&D Incentives: Industry/private-sponsored research programmes:

A weighted tax deduction is given under Section 35 (2AA) of the Income Tax
Act.

A weighted deduction of 200% is granted to assesses for any sums paid to a

national laboratory, university or institute of technology, or specified persons
with a specific direction that the said sum would be used for scientific research
within a program approved by the prescribed authority.

COMPANIES ENGAGED IN MANUFACTURE HAVING

AN IN-HOUSE R&D CENTRE:

A weighted tax deduction of 200% under Section 35 (2AB) of the Income

Tax Act for both capital and revenue expenditure incurred on scientific research
and development. Expenditure on land and buildings are not eligible for
deductions.

STATE INCENTIVES :
Apart from the above, each state in India offers additional incentives for
industrial projects. Some of the states also have separate policies for the textiles
sector.

Incentives are in areas like subsidised land cost, relaxation in stamp duty
exemption on sale/lease of land, power tariff incentives, concessional rates of
interest on loans, investment subsidies/tax incentives, backward areas subsidies
and special incentive packages for mega projects.

EXPORT INCENTIVES :

Export Promotion Capital Goods Scheme (PCGS).

Duty Remission Scheme.

Focus Product Scheme, Special Focus Product Scheme, Focus Market

Scheme.

INVESTMENTS AND OPPORTUNITIES

The textiles sector has witnessed a spurt in investment during the last five years.
The industry (including dyed and printed) attracted foreign direct investment (FDI)
worth US$ 1,522.51 million during April 2000 to December 2014.
Some of the major investments in the Indian textiles industry are as follows:

Reliance Industries Ltd (RIL) plans to enter into a joint venture (JV) with Chinabased Shandong Ruyi Science and Technology Group Co. The JV will leverage
RIL's existing textile business and distribution network in India and Ruyi's stateof-the-art technology and its global reach.

Giving Indian sarees a green touch, Dupont has joined hands with RIL and
Vipul Sarees for use of its renewable fibre product Sorona to make an
environment-friendly version of this ethnic ladieswear.

Raymond has launched Regio Italia, a luxurious, elite and finest Italian fabric
for its customers. Regio Italia is a fine collection of fabrics from Italy with the
latest designs that is carefully woven and specially handpicked assortment of the
best designs in formal and occasion menswear suiting fabrics.

Snapdeal has partnered with India Post to jointly work on bringing thousands of
weavers and artisans from Varanasi through its website. This is an endeavour
by Snapdeal and India Post to empower local artisans, small and medium
entrepreneurs to sustain their livelihood by providing a platform to popularise
their indigenous products, said Mr Kunal Bahl, CEO and Co-Founder,
Snapdeal.

 Welspun India Ltd (WIL), part of the Welspun Group has unveiled its new
spinning facility at Anjar, Gujarat - the largest under one roof in India. The
expansion project reflects the ethos of the Government of Gujarats recent
Farm-Factory-Fabric-Fashion-Foreign Textile Policy, which is aimed at
strengthening the entire textile value.

GLOBAL FACTORS INFLUENCING TEXTILE INDUSTRY

The history of the textile and clothing industry has been replete with the use of
various bilateral quotas, protectionist policies, discriminatory tariffs, etc. by the
developed world against the developing countries. The result was a highly distorted
structure, which imposed hidden costs on the export sectors of the Third World.
Despite the fact that GATT was established way back in 1947, the textile industry,
till 1994, remained largely out of its liberalisation agreements. In fact, trade in this
sector, until the Uruguay Round, evolved in the opposite direction. Consequently,
since 1974 global trade in the textiles and clothing sector had been governed by the
Multi-fibre agreement, which was the sequel to an increasingly pervasive quota
regime that began with the Short-term arrangement on cotton products in 1962 and
followed by the Long-Term arrangement. After the successful conclusion of the
Uruguay Round in 1994, the MFA was replaced by the Agreement on Textiles and
Clothing (ATC), which had the same MFA framework in the context of an agreed,
ten year phasing out of all quotas by the year 2005.

Some of the other factors which affect textile industry are as follows:

Demand condition : The more the demand for the textiles, the more will be the
production and the better it will be for the economy and vice versa.

Cost and location : It plays an important role in the profitability of the firm. If the
raw material is available near the factory the cost of transportation will not be there
and it will be more profitable for the firm

Rivalry: Competition exists in every sector. Higher the competition in the market
more will be the pressure on the company to perform and provide quality product
and services to survive in the market.

Government regulation: higher the tariffs and trade barriers lesser will be the
growth of the company and the economy viceversa.

SOME OF THE MAJOR PLAYERS IN TEXTILE INDUSTRY

ARE:
Vardhaman textiles
Arvind mills
Bombay dyeing
Raymond's
Grasim industries
Reliance textiles
ITC lifestyles
Mafatlal industries ltd
Alok Industries ltd

RAYMONDS

Introduction
Incorporated in 1925, Raymond Group is one of India's largest branded fabric and
fashion retailers. It is one of the leading, integrated producers of suiting fabric in
the world, with a capacity of producing 31 million meters of wool & wool-blended
fabrics.Gautam Singhania is the chairman and managing director of the Raymond
group.
The Group owns apparel brands like Raymond, Raymond Premium Apparel, Park
Avenue, Park Avenue Woman ColorPlus & Parx. All the brands are retailed through
'The Raymond Shop' (TRS) One of the largest network of over 700 retail shops
spread across India and overseas, in over 200 cities.

In addition, the Group also has business interests in readymade garments, designer
wear, cosmetics & toiletries, engineering files and tools, prophylactics and air
charter operations.
Today, the Raymond group is vertically and horizontally integrated to provide
customers total textile solutions. Few companies globally have such a diverse
product range of nearly 20,000 varieties of worsted suiting to cater to customers
across age groups, occasions and styles.
We manufacture for the world the finest fabrics - from wool to wool-blended
worsted suiting to specialty ring denims as well as high value shirting.
After making a mark in textiles, Raymond forayed into garmenting through highly
successful ventures like Silver Spark Apparel Ltd., EverBlue Apparel Ltd.
(Jeanswear) and Celebrations Apparel Ltd (Shirts).
We also have some of the most highly respected fabric and apparel brands in our
portfolio: Raymond, Raymond (Ready-To-Wear), Park
Avenue, ColorPlus, Parx, Makersand Notting Hill.
The Raymond Group also has an expansive retail presence established through the
exclusive chain of 'The Raymond Shop' and stand-alone brand stores.
They are today one of the largest players in fabrics, designer wear, denim,
cosmetics & toiletries, engineering files & tools, prophylactics and air charter
services in national and international market

GROUP COMPANIES

Raymond Ltd.
Raymond Ltd. is among the largest integrated manufacturers of worsted fabrics in
the world.
Raymond Apparel Ltd.

Raymond Apparel Ltd. has in its folio some of the most highly regarded apparel
brands in India Raymond (Ready-To-Wear), Park Avenue, Parx and Notting Hill.
ColorPlus Fashions Ltd.
ColorPlus is among the largest smart casual brands in the premium category. The
company was acquired by Raymond to cater to the growing demand for a high end,
casual wear brand in the country for Men & Women.
Silver Spark Apparel Ltd.
A garmenting facility that manufactures formal suits, trousers and jackets.
We manufacture for the world the finest fabrics - from wool to wool-blended
worsted suiting to specialty ring denims as well as high value shirting.
Celebrations Apparel Ltd.
A facility set-up for the manufacture of formal shirts.
Raymond Luxury Cottons Ltd.
A Greenfield facility manufacturing high value cotton shirting.
J.K. Helene Curtis Ltd.
A leading player in the grooming, accessories and toiletries category.

SWOT ANALYSIS
The SWOT analysis and company profile is a crucial resource for industry
executives and anyone looking to gain a better understanding of the company's
business. The SWOT analysis of the company is as follows:
STRENGTH

1. Strong research and development for product and innovations.

2. Loyalty of customers and high product quality.
3. Loyalty of employees due to decentralization.
4. Owns 550 stores in more 200 cities across India and overseas.
5. People trust on products and high brand loyalty.
6 Being a multinational company it has the ability to attract more customers than
local companies.
7. Good advertising and popular branding through TVCs and print ad campaigns.

WEAKNESS
1. Global penetration is limited as compared to a few other international brands
2. Presence of Indian and international brands offers more offering to customers
therefore high brand switching.

OPPORTUNITY
1. Consistent growth over years.
2.Large and growing market.
3. Global expansion would give more opportunities for brand to grow.

THREATS
1. All major players in the industry are competing with each other not only on low
price but also better quality.
2. Regional trade alliances.
3. Increased social and ecological awareness will put pressure on company to
follow international labor laws and environmental laws.

PEST ANALYSIS

PEST analysis (Political, Economic, Social and Technological analysis)

describes a framework of macro-environmental factors used in the environmental
scanning component of strategic management.
It is a part of the external analysis when conducting a strategic analysis or
doing market research, and gives an overview of the different macroenvironmental factors that the company has to take into consideration. It is a useful
strategic tool for understanding market growth or decline, business position,
potential and direction for operations.

POLITICAL
The Government has announced the release of a subsidy of US$ 533.87 million
for the textile industry.
Removal of trade related tariffs and non-tariff barriers in 2005
The government has extended 10% capital subsidy and 5% interest subsidy
on installation of machineries and for processing machinery.
A 41-member Working Group has also been announced to be set up with a
National Fiber Policy, to ensure self-sufficiency in fiber consumption and
export requirements in India.
ECONOMIC
Indian textile industry contributes about 14% to industrial production, 4% to
the country's gross domestic product (GDP) and 16.63% to export earnings.
Nearly 40% of the textiles produced in the country is exported and the
textiles sector is the biggest employment generator after agriculture
The sector is expected to generate 12 million new jobs
Indian textiles and apparel exports, which is worth US$ 22 billion, is
expected to register a four-fold increase to touch US$ 90 to 100 billion in the
next 25 years

SOCIAL
The market for textile is growing as a whole as Indias population grows at
about 1-2% annually.
Along with that, Raymonds market segment of upper middle class and the
high class segment is also growing due to higher disposable incomes.
The textile industry is mainly a labor intensive industry as it provides
livelihood to the huge population, mainly consists of unskilled workers, and
thus plays a pivotal role in the development of any economy.
TECHNOLOGICAL
Since the textile industry is more labour intensive, technological factors do
not affect it too much, however since the government extends 10% capital
subsidy and 5% interest subsidy on installation of machineries and for
processing machinery under the TUFS, the textile industry can easily make
advancements in technology if it needs to.
Basic advancements in technology for the textile industry include
improvements in machinery for computerized flat knitting and embroidering.

CORPORATE GOVERNANCE

Raymond Limited (The Company) considers Corporate Governance as an

integral part of good management. The Company has adopted a Code of Business
Conduct & Ethics (the Code).This Code is applicable to the Board of Directors
and all Employees of the Company.
Each Director and Employee must comply with the letter and spirit of this Code.

COMPALIANCE WITH LAW.

ETHICAL CONDUCT.

CONFLICT OF INTEREST .

FAIR DEALINGS.

GIFT AND BUSINESS ENTERTAINMENT.

EQUAL OPPORTUNITIES.

CORPORATE SOCIAL RESPONSIBILITY ,HEALTH & SAFETY.

ENVIRONMENTAL PROTECTION.

ENCOURING AND REPORTING OF UNETHICAL BEHAVIOUR.

INSIDER TRADING.

REVIEW AND MODIFICATION.

FINANCIAL POSITON OF THE COMPANY

FINANCIAL PERFORMANCE
Amid optimism and rising business sentiments, the Company reported a
top-line growth of 21% over the Previous Year. At Standalone level,
the Gross Revenue from operations stood at Rs. 2645.47 crore compared
with Rs. 2185.91 crore in the Previous Year. The Operating Profit before
tax stood at Rs. 111.58 crore as against Rs. 64.61 crore in the Previous
Year. The Net Profit for the year stood at Rs. 100.00 crore against Rs.
88.12 crore reported in the Previous Year.
The Consolidated Gross Revenue from operations for FY 2015 was placed
atRs. 5374.54crore (Previous Year: Rs. 4593.74 crore), registering a growth
of 17%. The Consolidated Operating Profit stood atRs. 159.72 crore
(Previous Year: Rs. 160 crore). The Consolidated Profit after tax stood
at Rs. 112.81 crore (Previous Year: Rs. 107.63 crore).
DIVIDEND AND RESERVES
The Directors recommend a dividend of 30% i.e. Rs. 3 per equity share of
face value of Rs. 10 each aggregating to Rs. 18.41 crore (Previous Year: Rs. 12.28
crore). During the year under review, the Company transferred a sum of Rs. 43.75
crore to the Debenture Redemption Reserve (Previous Year: Rs. 45 crore). During
the year under review, no amount was transferred to GeneralReserve.
SHARE CAPITAL
The paid up Equity Share Capital as at March 31, 2015 stood at Rs. 61.38
crore. During the year under review, the Company has not issued shares
with differential voting rights nor has granted any stock options or
sweat equity. As on March 31, 2015, none of the Directors of the
Company hold instruments convertible into equity shares of the Company.
ANALYSIS AND REVIEW

The Textile and Apparel industry contributes around 6% to India''s GDP,

11% to export earnings and is the second largest employer (-whopping 55
million people) after agriculture. The industry has shown continued
growth with a potential to increase its global trade share from the
current 4.5% to 8% (USD 80 Billion) in the next 5 years supported by a
rich abundance of raw material, skilled labour and talent.
In FY 2015, the textile industry is estimated to have contributed USD
42 Billion (4%) to India''s GDP, and 27% to the country''s foreign
exchange inflows.
PERFORMANCE HIGHLIGHTS
During FY 2015, your Company's total Textile sales registered a growth
of 24%, Net Revenue being Rs. 2538.66 crore as against Rs.2051.29 crore in
FY 2014. The increase in sales was led by volume growth in domestic and
Export market and deeper penetration of shirting fabric market.
RAW MATERIAL
Major raw material prices, namely Wool, Polyester Staple Fibre, Viscose
Staple Fibre and Polymers were soft during the year, largely because of
steady international prices and a stable Rupee. Multiple internal raw
material cost saving initiatives have also helped in keeping costs in
control.
RETAIL NETWORK PRESENCE
Your Company was judicious in its Retail expansion plans. The Retail
network now covers a large number of Tier 4 and 5 cities. As on March
31, 2015 your Company had 1003 retail stores (including 43 overseas
stores) across all formats.This includes TRS (The Raymond Shop), EBO
(The Exclusive Brand Outlet) and Made-to-Measure (MTM).

Mar '15

Mar '14

Mar '13

Mar

12 mths

12 mths

12 mths

12 mths

12 mth

Total Share Capital

61.38

61.38

61.38

61.38

61.3

Equity Share Capital

61.38

61.38

61.38

61.38

61.3

0.00

0.00

0.00

0.00

0.0

Sources Of Funds

Share Application Money

Preference Share Capital

0.00

0.00

0.00

0.00

0.0

Reserves

1,106.38

1,039.40

969.58

1,042.92

1,004.2

Networth

1,167.76

1,100.78

1,030.96

1,104.30

1,065.5

535.64

661.65

656.09

637.30

733.0

Secured Loans
Unsecured Loans

555.00

577.09

350.00

363.27

352.8

Total Debt

1,090.64

1,238.74

1,006.09

1,000.57

1,085.9

Total Liabilities

2,258.40

2,339.52

2,037.05

2,104.87

2,151.5

Mar '15

Mar '14

Mar '13

Mar '12

Mar '1

12 mths

12 mths

12 mths

12 mths

12 mth

1,813.09

1,784.71

1,846.34

1,805.76

1,708.7

0.00

0.00

0.00

0.00

0.0

Application Of Funds
Gross Block
Less: Revaluation Reserves
Less: Accum. Depreciation

1,201.66

1,110.93

1,012.06

938.54

850.9

Net Block

611.43

673.78

834.28

867.22

857.7

Capital Work in Progress

167.40

157.72

144.88

116.55

77.3

Investments

708.68

770.18

744.85

777.30

740.1

Inventories

576.66

551.86

502.99

447.67

413.0

Sundry Debtors

569.81

480.45

416.26

392.40

320.4

95.46

51.58

18.25

12.86

15.5

1,241.93

1,083.89

937.50

852.93

749.0

453.88

355.62

359.61

336.89

385.3

0.00

0.00

0.00

0.00

0.0

1,695.81

1,439.51

1,297.11

1,189.82

1,134.4

0.00

0.00

0.00

0.00

0.0

874.97

657.87

936.16

781.53

613.4

49.92

43.78

47.89

64.47

44.6

Total CL & Provisions

924.89

701.65

984.05

846.00

658.1

Net Current Assets

770.92

737.86

313.06

343.82

476.2

Cash and Bank Balance

Total Current Assets
Loans and Advances
Fixed Deposits
Total CA, Loans & Advances
Deferred Credit
Current Liabilities
Provisions

Miscellaneous Expenses

0.00

0.00

0.00

0.00

0.0

2,258.43

2,339.54

2,037.07

2,104.89

2,151.5

Contingent Liabilities

260.20

256.49

260.61

255.52

331.0

Book Value (Rs)

190.25

179.34

167.96

179.91

173.6

Total Assets

Balancesheet
RATIO ANALYSIS
Mar
'15

Mar '14

Mar '13

Mar '12

Mar '11

10.00

10.00

10.00

10.00

10.00

3.00

2.00

1.00

2.50

1.00

36.99

39.36

28.04

39.38

35.29

430.97

356.07

331.11

306.61

244.63

--

--

--

164.20

157.93

69.28

69.28

69.28

69.28

69.28

Operating Profit Margin (%)

8.58

11.05

8.46

12.84

14.42

Profit Before Interest And Tax Margin (%)

4.81

5.58

2.63

6.79

7.22

Gross Profit Margin (%)

5.04

5.81

2.75

7.00

7.51

Cash Profit Margin (%)

7.05

7.86

4.79

7.54

14.28

Adjusted Cash Margin (%)

7.05

7.86

4.79

7.54

14.28

Net Profit Margin (%)

3.78

4.03

-2.35

2.99

-6.98

Adjusted Net Profit Margin (%)

3.60

3.87

-2.25

2.90

-6.71

11.50

9.31

7.32

8.97

7.47

Return On Net Worth (%)

8.56

8.00

-4.64

5.10

-9.84

Adjusted Return on Net Worth (%)

8.72

5.86

-1.35

3.30

11.21

Return on Assets Excluding Revaluations

190.25

179.34

167.96

179.91

173.60

Return on Assets Including Revaluations

190.25

179.34

167.96

179.91

173.60

13.60

10.77

8.70

10.22

8.15

Investment Valuation Ratios

Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Free Reserves Per Share (Rs)
Bonus in Equity Capital
Profitability Ratios

Return On Capital Employed (%)

Return on Long Term Funds (%)

Grasim Industries Limited

It is a flagship company of the Aditya Birla Group, ranks amongst India's largest private sector companies,
with a consolidated net revenue of Rs.293 billion and consolidated net profit of Rs.21 billion (FY 2014).
Grasim started as a textile manufacturer in 1948. Today its core businesses are Viscose Staple Fibre
(VSF) and Cement, contributing over 90 per cent of its revenues and operating profits. It is also present in
Chemicals which is essentially a backward integration of VSF.
The Aditya Birla Group is the worlds leading producer of VSF, commanding a 16 per cent global market
share. Grasim, with an aggregate capacity of 498 ktpa has a global market share of 8 per cent. It is also
the largest player in India in Chlor Alkali with Caustic capacity of 452K TPA (which is used in the
production of VSF) in India.
Grasim entered into Cement business in 1985 with a capacity of 0.5 million tpa. Over the years, through
organic and inorganic expansions, the business has grown multifold. Currently, Grasims subsidiary
UltraTech Cement Limited ("UltraTech") has a capacity of 63.15 million tpa. Earlier, in July 2004, Grasim
acquired a majority stake and management control in UltraTech. One of the largest-of-its-kind in the
cement sector, this acquisition catapulted Grasim to the top of the league in India. Subsequently, Grasim
demerged its cement business into UltraTech in July 2010. The merger has created the largest cement
company in India, providing a platform that will help in pursuing aggressive growth going forward.
Grasim is implementing ambitious growth plans through capacity expansions in VSF and Cement, which
will further consolidate its leadership in both the businesses.

Share Holding Pattern

Categor
y code

Category of
shareholder

Number of
shareholde
rs

Total
numbe
r of
shares

Number of
shares held
in
dematerializ
ed form

Total shareholding as Shares Pledged or

a percentage of total otherwise
number of shares
encumbered

As a
percenta
ge of
(A+B)[1]
(I)

(II)

(A)

Shareholding
of Promoter
and
Promoter
Group[2]

(1)

Indian

(a)

Individuals/
Hindu
Undivided
Family

(b)

Central
Government/
State
Government(
s)

(c)

Bodies
Corporate

(d)

Financial
Institutions/
Banks

(e)

Any Others
(Specify)
Sub-Total
(A)(1)

(2)

Foreign

(a)

Individuals
(NonResident
Individuals/
Foreign
Individuals)

(b)

Bodies

(III)

(IV)

(V)

(VI)

(VII)

13337
2

133372

23296
096

23296096

29.55

25.36

22 23429
468

23429468

29.72

25.50

17

0.17

As a
percenta
ge of
(A+B+C)

Numbe
As a
r of
Percentage
Shares
(IX)= (VIII)/
(IV)*100

(VIII)

0.15
0

Corporate
(c)

Institutions

(d)

Qualified
Foreign
Investor

(e)

Any Other
(specify)
Sub-Total
(A)(2)
Total
Shareholdi
ng of
Promoter
and
Promoter
Group (A)=
(A)(1)+(A)
(2)

(B)

22 23429
468

23429468

29.72

25.50

Public
shareholding[
3]

(1)

Institutions

(a)

Mutual
Funds/ UTI

(b)

Financial
Institutions/
Banks

(c)

Central
Government/
State
Government(
s)

(d)

Venture
Capital
Funds

(e)

Insurance
Companies

(f)

Foreign
Institutional
Investors

(g)

Foreign
Venture
Capital
Investors

(h)

Qualified
Foreign
Investor

(i)

Any Other

N.A.
N.A.
185

72766
46

7268668

9.23

7.92

73

22517
8

212642

0.29

0.25

42

84463
72

8442886

10.71

9.19

206

20918
792

20917201

26.53

22.77

0.00

0.00

0.00

0.00

N.A.

(Specify)
Sub-Total
(B)(1)
(2)

Noninstitutions

(a)

Bodies
Corporate

(b)

Individuals -

II

(c)

36841397

46.76

40.13

1461

64161
47

6342463

8.14

6.98

Individual
shareholders
holding
nominal
share capital
up to Rs. 1
lakh.

127496

81869
57

6600410

10.38

8.91

Individual
shareholders
holding
nominal
share capital
in excess of
Rs. 1 lakh.

19

72904
0

729040

0.92

0.79

26226
13

0.33

2.85

4130

58851
7

367251

0.75

0.64

13313 18543
274

14039164

23.52

20.18

Total Public
Shareholdi
ng (B)= (B)
(1)+(B)(2)

133619 55410
262

50880561

70.28

60.32

TOTAL (A)+
(B)

133641 78839
730

74310029

N.A.

N.A.

N.A.

N.A.

N.A.

N.A.

Qualified
Foreign
Investor

(d)(i)

Any otherOverseas
Body
Corporate
(OCBs)

(d)(ii)

Any OtherNon
Resident
Indian (NRIs)
Sub-Total
(B)(2)

(C)

506 36866
988

Shares held
by
Custodians
and against
which
Depository
Receipts
have been
issued*

100.00

85.82

Promoter
and
Promoter
Group*

48023
04

4802304

xxx

5.23

Public

82246
15

8224615

xxx

8.95

TOTAL (C)

1 13026
919

13026769

xxx

14.18

133642 91866
649

87336798

xxx

100.00

GRAND
TOTAL (A)+
(B)+(C)

Swot Analysis

STRENGTH
The company is a subsidiary of Aditya Birla Group, which operates over 40
companies in 12 countries
It is the world's second largest producer of viscose rayon fiber.
Strong brand equity of Aditya Birla Group.

WEAKNESS
Grasim industries have fluctuating sales which can affect profitability.
Input costs have risen which has resulted in reduced profits.

OPPORTUNITY
Grasim Industries should focus on increasing branding activities, this can result into
higher sales.
It can expand its operations to other countries.

THREAT
Grasim Industries is facing a huge competition from other key players in the
respected segments.

Cheaper local brands are increasing their hold in the country.

Balance sheet
Balance Sheet of Grasim Industries

------------------- in Rs. Cr. ------------------Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

12 mths

12 mths

12 mths

12 mths

12 mths

Total Share Capital

91.87

91.83

91.78

91.71

91.70

Equity Share Capital

91.87

91.83

91.78

91.71

91.70

Share Application Money

0.01

0.01

0.01

0.01

0.01

Preference Share Capital

0.00

0.00

0.00

0.00

0.00

Reserves

11,091.05

10,735.74

10,030.07

9,007.67

8,042.02

Networth

11,182.93

10,827.58

10,121.86

9,099.39

8,133.73

839.79

1,058.29

1,022.78

548.71

445.13

Sources Of Funds

Secured Loans
Unsecured Loans

90.95

73.25

148.96

81.63

104.61

930.74

1,131.54

1,171.74

630.34

549.74

12,113.67

11,959.12

11,293.60

9,729.73

8,683.47

Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

12 mths

12 mths

12 mths

12 mths

12 mths

7,323.14

5,438.92

3,754.53

3,108.00

2,976.80

0.00

0.00

0.00

0.00

0.00

Less: Accum. Depreciation

2,135.60

1,891.18

1,682.57

1,559.47

1,434.99

Net Block

5,187.54

3,547.74

2,071.96

1,548.53

1,541.81

450.36

1,807.45

2,425.09

476.94

56.53

Investments

5,350.34

5,603.64

6,224.43

6,829.74

6,910.25

Inventories

1,433.15

1,212.27

789.34

630.91

421.65

Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Revaluation Reserves

Capital Work in Progress

Sundry Debtors

687.49

Cash and Bank Balance

613.79

516.63

509.23

455.63

53.19

26.30

16.27

11.02

14.65

Total Current Assets

2,173.83

1,852.36

1,322.24

1,151.16

891.93

Loans and Advances

1,205.14

1,066.46

1,008.05

1,029.70

606.08

Fixed Deposits

0.00

0.00

0.00

0.00

0.00

3,378.97

2,918.82

2,330.29

2,180.86

1,498.01

0.00

0.00

0.00

0.00

0.00

1,750.13

1,410.03

1,242.16

836.47

864.71

503.41

508.50

516.01

469.87

458.42

Total CL & Provisions

2,253.54

1,918.53

1,758.17

1,306.34

1,323.13

Net Current Assets

1,125.43

1,000.29

572.12

874.52

174.88

0.00

0.00

0.00

0.00

0.00

12,113.67

11,959.12

11,293.60

9,729.73

8,683.47

751.52

806.82

688.79

1,912.68

889.05

1,217.49

1,179.13

1,102.88

992.19

887.00

Total CA, Loans & Advances

Deferred Credit
Current Liabilities
Provisions

Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

Profit and Loss

Profit & Loss account of Grasim Industries

------------------- in Rs. Cr. ------------------Mar '15

Mar '14

Mar '13

Mar '12

Mar

12 mths

12 mths

12 mths

12 mths

12 mths

6,899.3
9

6,100.07

5,734.77

5,353.88

5,014.42

Excise Duty

566.81

496.57

479.76

384.16

374.36

Net Sales

6,332.5
8

5,603.50

5,255.01

4,969.72

4,640.06

Other Income

321.83

384.79

639.00

463.46

297.77

65.04

-4.05

26.56

132.10

10.09

6,719.4
5

5,984.24

5,920.57

5,565.28

4,947.92

3,177.76

2,853.01

2,566.00

2,072.56

814.58

714.33

675.68

498.85

Income
Sales Turnover

Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost

3,827.1
8
1,040.6
2

Employee Cost

482.25

378.80

373.67

331.14

295.63

Other Manufacturing Expenses

199.21

74.09

84.30

56.22

45.30

0.00

0.00

0.00

0.00

0.00

183.39

292.89

168.08

214.43

218.78

0.00

0.00

0.00

0.00

0.00

Selling and Admin Expenses

Miscellaneous Expenses
Preoperative Exp Capitalised

5,732.6
5

4,738.12

4,193.39

3,843.47

3,131.12

Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

12 mths

12 mths

12 mths

12 mths

12 mths

Operating Profit

664.97

861.33

1,088.18

1,258.35

1,519.03

PBDIT

986.80

1,246.12

1,727.18

1,721.81

1,816.80

Interest

39.33

41.52

39.09

35.82

45.81

PBDT

947.47

1,204.60

1,688.09

1,685.99

1,770.99

Depreciation

Total Expenses

262.55

219.61

159.21

144.20

176.29

Other Written Off

0.00

0.00

0.00

0.00

0.00

Profit Before Tax

684.92

984.99

1,528.88

1,541.79

1,594.70

Extra-ordinary items

0.00

0.00

0.00

0.00

0.00

PBT (Post Extra-ord Items)

684.92

984.99

1,528.88

1,541.79

1,594.70

Tax

155.02

89.00

302.89

364.79

412.99

Reported Net Profit

529.90

895.99

1,225.99

1,177.00

1,181.71

Total Value Addition

1,905.4
7

1,560.36

1,340.38

1,277.47

1,058.56

0.00

0.00

0.00

0.00

0.00

168.74

192.84

206.52

206.36

183.40

0.00

7.48

9.81

12.02

13.66

918.52

918.27

917.77

917.10

916.99

57.69

97.57

133.58

128.34

128.87

Equity Dividend (%)

180.00

210.00

225.00

225.00

200.00

Book Value (Rs)

1,217.4
9

1,179.13

1,102.88

992.19

887.00

Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)

Cash Flow Statement

Cash Flow of Grasim Industries

------------------- in Rs. Cr. ------------------Mar '15

Mar '14

Mar '13

Mar '12

12 mths

12 mths

12 mths

12 mths

12 mths

Net Profit Before Tax

684.92

984.99

1528.88

1541.79

1594.70

Net Cash From Operating Activities

449.64

62.28

848.57

791.21

1006.94

25.47

221.49

-1156.98

-467.96

-433.27

-448.22

-273.74

313.66

-326.88

-574.94

Net Cash (used in)/from

Investing Activities
Net Cash (used in)/from Financing Activities

Mar '11

Net (decrease)/increase In Cash and Cash

Equivalents

26.89

10.03

5.25

-3.63

-1.27

Opening Cash & Cash Equivalents

26.30

16.27

11.02

14.65

15.92

Closing Cash & Cash Equivalents

53.19

26.30

16.27

11.02

14.65

Ratios

Key Financial Ratios of Grasim Industries

Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

Face Value

10.00

10.00

10.00

10.00

10.00

Dividend Per Share

18.00

21.00

22.50

22.50

20.00

Operating Profit Per Share (Rs)

72.40

93.80

118.57

137.21

165.65

689.43

610.22

572.59

541.90

506.01

Investment Valuation Ratios

Net Operating Profit Per Share (Rs)

Free Reserves Per Share (Rs)
Bonus in Equity Capital

--

--

--

--

--

32.14

32.15

32.17

32.19

32.20

10.50

15.37

20.70

25.32

32.73

6.02

10.71

16.32

20.50

27.19

Profitability Ratios
Operating Profit Margin (%)
Profit Before Interest And Tax Margin (%)
Gross Profit Margin (%)

6.35

11.45

17.67

22.41

28.93

Cash Profit Margin (%)

12.25

18.62

20.75

24.31

27.50

Adjusted Cash Margin (%)

12.25

18.62

20.75

24.31

27.50

Net Profit Margin (%)

8.36

15.98

23.32

23.68

25.46

Adjusted Net Profit Margin (%)

7.93

14.96

21.54

21.66

23.93

Return On Capital Employed (%)

6.19

8.58

12.07

16.21

18.89

Return On Net Worth (%)

4.73

8.27

12.11

12.93

14.52

Adjusted Return on Net Worth (%)

4.97

8.27

10.09

12.93

14.52

Return on Assets Excluding Revaluations

1,217.49

1,179.13

1,102.88

992.19

887.00

Return on Assets Including Revaluations

1,217.49

1,179.13

1,102.88

992.19

887.00

6.23

8.67

12.28

16.32

19.02

Current Ratio

1.45

1.36

1.14

1.53

1.04

Quick Ratio

0.86

0.89

0.88

1.19

0.81

Debt Equity Ratio

0.08

0.10

0.12

0.07

0.07

Long Term Debt Equity Ratio

0.08

0.09

0.10

0.06

0.06

Return on Long Term Funds (%)

Liquidity And Solvency Ratios

Debt Coverage Ratios

Interest Cover
Total Debt to Owners Fund

19.08

24.72

34.88

44.04

35.81

0.08

0.10

0.12

0.07

0.07

Financial Charges Coverage Ratio

25.76

30.01

38.95

48.07

39.66

Financial Charges Coverage Ratio Post Tax

21.15

27.87

36.44

37.88

30.64

Inventory Turnover Ratio

4.81

5.03

7.27

8.49

11.89

Debtors Turnover Ratio

9.73

9.91

10.25

10.30

11.59

Investments Turnover Ratio

4.81

5.03

7.27

8.49

11.89

Fixed Assets Turnover Ratio

0.87

1.03

1.40

1.60

1.56

Total Assets Turnover Ratio

0.52

0.47

0.47

0.51

0.53

Asset Turnover Ratio

0.53

0.48

0.50

0.54

0.55

Average Raw Material Holding

--

--

--

--

--

Average Finished Goods Held

--

--

--

--

--

98.19

92.86

61.76

80.04

28.87

Material Cost Composition

60.43

56.71

54.29

51.63

44.66

Imported Composition of Raw Materials

Consumed

65.41

53.42

46.70

41.75

46.40

Management Efficiency Ratios

Number of Days In Working Capital

Profit & Loss Account Ratios

Selling Distribution Cost Composition

--

--

--

--

--

25.40

26.90

24.44

22.94

18.22

Dividend Payout Ratio Net Profit

31.84

21.52

16.84

17.53

15.51

Dividend Payout Ratio Cash Profit

21.29

17.28

14.90

15.61

13.50

Earning Retention Ratio

69.66

78.48

79.79

82.47

84.49

Cash Earning Retention Ratio

79.39

82.72

82.51

84.39

86.50

1.14

1.01

0.99

0.48

0.40

Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

Expenses as Composition of Total Sales

Cash Flow Indicator Ratios

AdjustedCash Flow Times

Earnings Per Share

Book Value

57.69

97.57

133.58

128.34

128.87

1,217.49

1,179.13

1,102.88

992.19

887.00