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    Grasim Inds

    GRASIMGood
    Construction Materials·8 Aug 2025
    Management Summary

    Grasim delivered a strong Q1 FY26 with 20 consecutive quarters of YoY revenue growth and TTM consolidated revenue crossing ₹1,50,000 crores. The paints business Birla Opus continued gaining market share with 10%+ industry share, while the cement business UltraTech outpaced industry growth. Chemical business benefited from 10% YoY higher ECU realizations, though epoxy margins faced compression from raw material hardening and duty-free imports.

    Highlights

    8

    • Consolidated revenue grew 16% YoY to ₹40,118 crores; standalone revenue at record ₹9,223 crores, up 34% YoY

    • Consolidated EBITDA at ₹6,430 crores, up 36% YoY driven by cement and chemicals profitability

    • Birla Opus paints achieved double-digit QoQ revenue growth; premium/luxury products at 65% of revenue

    • Organized decorative paints industry grew 5% YoY; excluding Birla Opus, industry was flat to marginally negative

    • UltraTech cement volume growth of 10% YoY; EBITDA per ton at ₹1,248, up 37% YoY; capacity at 192.3 MTPA

    • Chemical business revenue grew 16% YoY to ₹2,391 crores; EBITDA up 36% YoY to ₹422 crores

    • Birla Pivot B2B e-commerce on track for ₹8,500 crore revenue run rate by FY27; high single-digit sequential growth

    • Total paint CAPEX spent: ₹9,555 crores; 6th plant at Kharagpur trial production begun, commercial launch by end Q2 FY26

    What Changed3

    vs Q2 FY26

    Guidance items7 → 5 (-2)Risks discussed6 → 5 (-1)Q&A highlights7 → 3 (-4)

    Key financials

    Single quarter

    06 metrics
    1. 01Consolidated Revenue₹40,118 Cr+16%YoY
    2. 02Standalone Revenue₹9,223 Cr+34%YoY
    3. 03Consolidated EBITDA₹6,430 Cr+36%YoY
    4. 04Chemical Revenue₹2,391 Cr+16%YoY
    5. 05Chemical EBITDA₹422 Cr+36%YoY

    Segment breakdown

    Cement (UltraTech)
    13% Revenue Growth1,248 Rs/MT EBITDA per ton192.3 MTPA Capacity10% Volume Growth
    Chemicals
    ₹2,391 Cr Revenue₹422 Cr EBITDA8% Volume Growth10% ECU Realization Growth
    Cellulosic Fibres
    ₹4,043 Cr Revenue-17% EBITDA Decline82% Utilization
    Birla Opus (Paints)
    ₹9,555 Cr Total CAPEX Spent1,332 Mn Installed Capacity Post 6th Plant65% Premium+Luxury Revenue Share
    Financial Services (ABC)
    8% Revenue Growth₹1.6L Cr Lending Portfolio₹5.5L Cr Total AUM
    Renewables
    1.9 GW Installed Capacity
    List

    Guidance & targets

    5
    CategoryTargetPriority
    B2B E-commerce
    Revenue run rate target
    ₹8,500 crores ($1 billion) by FY27
    		High
    B2B E-commerce
    EBITDA breakeven
    EBITDA positive at $1 billion revenue scale
    		High
    Paints
    Capacity after 6th plant
    1,332 million liters per annum (24% of India's organized capacity)
    		High
    Chemicals
    ECH and CPVC plant completion
    Mechanical completion in Q3 FY26
    		High
    Capex
    FY26 standalone CAPEX plan
    ₹2,263 crores
    		High

    Risks & concerns

    8
    RiskSeverity

    Paint industry pricing pressure from economy segment discounting by incumbents

    Excluding Birla Opus, organized decorative paints industry degrew or was flat YoY. Incumbents pushing economy products with heavy discounting, compressing industry value growth. — Both acknowledged

    medium

    Epoxy margin compression from raw material costs and duty-free Korean imports

    ECH prices hardening with antidumping duty, while epoxy imports from Korea enter duty-free via FTA. Industry representation to government underway but outcome uncertain. — Both acknowledged

    medium

    Cellulosic fibre EBITDA declined 17% YoY due to high input costs including caustic soda

    Global demand slowdown reduced utilization to 82% with inventory rising to 20 days. Fashion yarn realizations impacted by cheaper Chinese imports. — Management acknowledged

    medium

    CCI investigation into abuse of dominance by dominant paint player

    Grasim filed information with CCI; DG investigation ordered on July 1, 2025. Matter is subjudice and outcome uncertain. — Management acknowledged

    medium

    New chlor-alkali capacity from Adani and Reliance entering market

    Management noted the global caustics picture is complex - PVC capacity additions in one area subtract from another. Indian market not insulated from global dynamics. — Analyst downplayed

    low

    Areas of Evasion(3)

    • Birla Opus exact revenue and CWIP breakdown
    • Epoxy current margin levels
    • Chlorine derivative capacity utilization details

    Q&A highlights

    3

    “The fact is the larger universe and majority of them continue to grow with us and giving us more counter share... We are purely on the growth phase.”

    Addresses market concerns about dealer attrition; management firmly denies consolidation narrative and confirms growth trajectory

    asked by Mihir Shah (Nomura)

    2 min read4 chapters

    Detailed Narrative

    01

    Birla Opus Paints: Rapid Scale-up Despite Industry Slowdown

    Birla Opus delivered double-digit QoQ revenue growth with estimated paint revenues around ₹1,100 crores for the quarter. The brand has expanded to 8,000+ towns with ~50,000 dealers, maintaining 65% premium/luxury revenue mix. Management firmly denied dealer attrition rumors. The 6th plant at Kharagpur has begun trial production, taking total capacity to 1,332 million liters (24% of organized industry). The 10% extra grammage offer on emulsion packs continues. CCI has ordered DG investigation into abuse of dominance by the dominant paint player based on Grasim's filing.

    02

    Chemicals Business: ECU Recovery Offset by Epoxy Pressure

    Chemical revenue grew 16% YoY to ₹2,391 crores with EBITDA up 36% YoY to ₹422 crores. ECU realizations were 10% higher YoY and flat sequentially. Chlor-alkali utilization was slightly above 80% with chlorine trading at negative ₹6,000-6,500. Renewable energy reached 15% of power mix. However, epoxy margins face compression from hardening ECH prices (antidumping duty) and duty-free Korean imports via FTA. ECH and CPVC plants with Lubrizol on track for mechanical completion in Q3 FY26.

    03

    UltraTech Cement: Industry-Leading Growth with Expanded Capacity

    UltraTech delivered 13% revenue growth and 10% volume growth YoY, outpacing industry growth of 4-5%. EBITDA per metric ton surged 37% YoY to ₹1,248 driven by scale benefits and cost optimization. Total capacity reached 192.3 MTPA after adding 37.4 MTPA through greenfield expansion and acquisitions of Kesoram, India Cement, and RAK (UAE). The cement business remains the strongest EBITDA contributor to Grasim's consolidated numbers.

    04

    Financial Services and New Growth Engines

    Aditya Birla Capital reported 8% YoY revenue growth with housing finance up 65% and health insurance up 31%. Total lending portfolio grew 30% YoY to ₹1,65,000 crores though NIM compressed 59 bps YoY. AUM crossed ₹5,53,000 crores with Life Insurance AUM crossing ₹1,00,000 crore milestone. Birla Pivot B2B e-commerce grew high single digits sequentially despite monsoon weakness, remains on track for ₹8,500 crore ($1B) revenue by FY27 with EBITDA breakeven at that scale. Renewable capacity doubled to 1.9 GW.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.