Grasim Inds — Q1 FY26 earnings call

Call held 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

  • 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

Key financials

  1. Consolidated Revenue ₹40,118 Cr +16%YoY
  2. Standalone Revenue ₹9,223 Cr +34%YoY
  3. Consolidated EBITDA ₹6,430 Cr +36%YoY
  4. Chemical Revenue ₹2,391 Cr +16%YoY
  5. Chemical EBITDA ₹422 Cr +36%YoY
  6. Cellulosic Fibre Revenue ₹4,043 Cr +7%YoY

What they filed

Q1 FY27: revenue up 21.4%, net profit up 38.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue34,223 35,378 44,267 40,118 39,900 +17%44,312 +25%51,101 +15%48,716 +21%
EBITDA6,026 6,804 8,750 8,822 7,671 +27%8,870 +30%10,874 +24%11,152 +26%
Net profit983 1,734 2,973 2,771 1,498 +52%2,233 +29%3,684 +24%3,846 +39%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Cement (UltraTech)
    13% Revenue Growth₹1,248/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 million liters/annum Installed Capacity Post 6th Plant65% Premium+Luxury Revenue Share
  • Financial Services (ABC)
    8% Revenue Growth₹1.65L Cr Lending Portfolio₹5.53L Cr Total AUM
  • Renewables
    1.9 GW Installed Capacity

Guidance & targets

B2B E-commerce

  • Revenue run rate target B2B E-commerce · FY27 · High confidence ₹8,500 crores ($1 billion) by FY27
    The business annualized the revenue run rate continues to rise and remains on track to achieve ₹8,500 crore that is the billion-dollar ambition by FY27

    — Himanshu Kapania

  • EBITDA breakeven B2B E-commerce · FY27 · High confidence EBITDA positive at $1 billion revenue scale
    at a scale of $1 billion, which is what we are estimating that we hit in FY27. We are confident that we will break even at that scale. And all our indications and our trends right now are pointing towards that, if not sooner

    — Sandeep Komaravelly

Paints

  • Capacity after 6th plant Paints · Q2 FY26 · High confidence 1,332 million liters per annum (24% of India's organized capacity)
    post the launch of this 6th plant, the Birla Opus installed capacity will rise to 1,332 million liters per annum, estimated to reach 24% of India's organized paint industry capacity

    — Himanshu Kapania

Chemicals

  • ECH and CPVC plant completion Chemicals · Q3 FY26 · High confidence Mechanical completion in Q3 FY26
    mechanical completion of two projects namely ECH and CPVC plant with Lubrizol would be completed in Q3 FY26

    — Pavan Jain

Capex

  • FY26 standalone CAPEX plan Capex · FY26 · High confidence ₹2,263 crores
    Grasim has announced CAPEX plan of spending ₹2,263 crores in FY26 out of which ₹480 crore has already been spent in Q1 FY26

    — Pavan Jain

Risks & concerns

  • Paint industry pricing pressure from economy segment discounting by incumbents

    medium

    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

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

    medium

    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

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

    medium

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

    Management acknowledged

  • CCI investigation into abuse of dominance by dominant paint player

    medium

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

    Management acknowledged

  • New chlor-alkali capacity from Adani and Reliance entering market

    low

    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

Areas of evasion (3)

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

Q&A highlights

2 direct
Birla Opus dealer retention and growth phase Direct
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)

Paint industry competitive intensity and economy segment discounting Direct
the competitive intensity remains... the intensity has been increased on the value or the economy segment. The level of discounting has gone up

Confirms industry pricing pressure concentrated in economy segment; Birla Opus maintains 65% premium/luxury mix showing differentiated positioning

Asked by Rahul Gupta (Morgan Stanley)

Epoxy margin compression from ECH costs and FTA imports Partial
within the epoxy chain, the industry is in a margin compression between hardening raw material prices, antidumping duty on one hand and duty-free imports on the other hand

Reveals structural profitability challenge in epoxy business; management hopes for government FTA review but outcome uncertain

Asked by Nirav (Anvil Wealth)

2 min read 4 chapters

Detailed narrative

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.

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.

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.

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.

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