Grasim spurted 5.4% to Rs 367 late afternoon on Tuesday after the company's results turned out better than analysts' expectations.

At that level, the scrip of the A V Birla group VSF and cement maker was trading close to the day's high of Rs 368.85. Around 314,000 Grasim Industries shares changed hands on BSE so far.

The stock has been consistently firming up on the bourses over the last few months. This was also partly due to a favourable decision regarding Grasim's acquisition of L&T shares - Sebi had recently absolved the company over the issue of management control over L&T. That was followed by Grasim's announcing an open offer at the original price of Rs 190 per share for L&T.

From Rs 330.70 on 31 March 2003, Grasim surged 5.3% to Rs 348.55 on Monday. Today's rally took the scrip to a 52-week high.

For Q4 ended 31 March 2003, Grasim has posted a net profit of Rs 4.9 million compared to a net profit of Rs 79.23 crore. However, as per reports, there was a huge extraordinary expense of Rs 209 crore (Rs 2.09 billion) in the quarter under review.

This means that Q4 net profit would be to the tune of about Rs 209-plus-crore had it not been for the extraordinary expense. This approximate figure is much higher than the expected range of between Rs 124-145 crore (Rs 1.24-1.45 billion) as per a capitalmarket.com poll.

Total income increased 8.3% to Rs 1,267.06 crore (Rs 12.67 billion) from Rs 1,169.86 crore (Rs 11.69 billion). The poll had forecast a between 3.4% to 12.6% rise in net sales to between Rs 1,149 crore (Rs 11.49 billion) and Rs 1,251 crore (Rs 12.51 billion) from Rs 1,111.10 crore (Rs 11.11 billion).

For FY 2002-03, net profit jumped 21.3% to Rs 367.58 crore (Rs 3.67 billion) from Rs 302.96 crore (Rs 3.02 billion). Total income grew 5.3% to Rs 4,742.13 crore (Rs 47.42 billion) from Rs 4,501.26 crore (Rs 45.01 billion).

The company said its outlook is bright with all its major businesses contributing to the improved performance. The company's focus on operational excellence, cost optimisation, effective financial management, continuous restructuring of business processes together with expected improvement in cement sector bodes well for the company in the times ahead, Grasim said in a statement.

Grasim's two key business are cement and viscose filament yarn.

In the cement sector, Grasim's acquisition of a stake in L&T is seen as a key development what with the huge amount invested. After acquiring a 10% stake in L&T from Reliance, Grasim had mopped up further shares from the open market raising its stake to about 15% before it announced the open offer at Rs 190 in October 2002.

Analysts feel that Grasim has been vindicated by the latest Sebi ruling in its favour considering the huge investment it had made in L&T.

Grasim's Q4 performance is in extension of the trend witnessed in Q3 when it unveiled strong results. An improvement in operating efficiency had resulted in a surge in Grasim's profit margins in Q3. For Q3 ended 31 December 2002, Grasim reported a 48% growth in profit after tax to Rs 132.95 crore (Rs 1.32 billion) on an 11% growth in net sales to Rs 1,166.59 crore (Rs 11.66 billion).

BSE code: 500300