Grasim's operating margin was impacted mainly due to increase in operating costs. Its raw material cost increased 17 per cent to Rs.1,952 crore, fuel cost increased 13 per cent to Rs. 1,589 crore and its freight cost soared 18 per cent to Rs. 389 crore from a year ago.
On a full year basis, the company has reported a 23 per cent decline in net profit at Rs. 2,072 crore against Rs. 2,704 crore reported in fiscal 2013.
Its VCF (viscose staple fibre) margins were the worst in this quarter. Analysts say its VCF margins will be in pressure due to overcapacity in China.
The company said its cement business growth will improve gradually to eight per cent as an improvement is seen in the economic environment.