GRASIMNSEq4fy25May 23, 2025

Grasim Industries Limited

9,449words

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11analyst exchanges

0executives

Key numbers — 40 extracted

2 billion

I joined the Aditya Birla Group in the telecom business in 1997. At that stage, the group was US$2 billion in revenue and dollar conversion was ₹36, with presence in textile, aluminum and start of cement,

₹36,

business in 1997. At that stage, the group was US$2 billion in revenue and dollar conversion was ₹36, with presence in textile, aluminum and start of cement, telecom, fashion, financial services, and

66 billion

last 28 years under the leadership of Mr. Kumar Mangalam Birla, the group revenue has risen to US$66 billion, and the dollar conversion is ₹85, thereby growing by 33 times at constant currency. This superla

₹85,

Kumar Mangalam Birla, the group revenue has risen to US$66 billion, and the dollar conversion is ₹85, thereby growing by 33 times at constant currency. This superlative growth has been driven by a) Be

15%

to newer sectors. Similarly, the story of Grasim's transformation, which has delivered consistent 15% CAGR over a long period of 15 years, is akin to India's growth story. The company has incorpora

rs,

y of Grasim's transformation, which has delivered consistent 15% CAGR over a long period of 15 years, is akin to India's growth story. The company has incorporated multiple start-ups and seen through

f India's booming infrastructure, the construction sector. This sector alone is poised to command 9% of GDP translating to US$900 billion in around 10 years. Grasim's deep insight into building mate

900 billion

ture, the construction sector. This sector alone is poised to command 9% of GDP translating to US$900 billion in around 10 years. Grasim's deep insight into building materials ecosystem found over the years

10%

eveloped nations. For a country at the forefront of economic acceleration, India ranked at bottom 10% of the paint consumption. This reminds me of my telecom stint when India liberalized telecom serv

₹10,000 crore

ion to redefine the industry with consumer-centric programs and practices. They empowered us with ₹10,000 crore investment to prepare for tomorrow with a single-minded purpose to revolutionize the decorative p

1,096 million

test capacity ramp-up in the world with 5 out of 6 plants commercialized until March 2025, adding 1,096 million liters per annum, in short MLPA capacity in FY '25, representing 21% share of the organized decor

21%

March 2025, adding 1,096 million liters per annum, in short MLPA capacity in FY '25, representing 21% share of the organized decorative paints capacity. All these plants are fully backward integrated

Guidance — 20 items

Himanshu Kapania

opening

“Similarly, the story of Grasim's transformation, which has delivered consistent 15% CAGR over a long period of 15 years, is akin to India's growth story.”

Pavan Jain

opening

“As approved by the Board, the work on the first phase of Lyocell Fibre project of 55,000 tonnes per annum, out of the total capacity plant of 110,000 tonnes at Harihar, Karnataka, the work has commenced.”

Pavan Jain

opening

“The projects of ECH and CPVC plants at Vilayat are expected to be commissioned around Q2 FY26.”

Amit Purohit

“So just a clarification on that will be helpful.”

Amit Purohit

“And any targeted market share guidance you would like to highlight right now, say, for March '26.”

Rakshit Hargave

“And for next year, the ambition is to be a double-digit player, we'd love to hit that.”

Vadiraj Kulkarni

“One, there is a Lyocell project setting up 55,000 tonnes per annum of capacity is being approved.”

Rakshit Hargave

“Now like I said, we are not giving a guidance or a target for next year.”

Percy Panthaki

“And what is the product segment mix in terms of are you strong in, of course, East, you've probably not yet had a plant, so it will be weak.”

Navin Sahadeo

“Now our understanding basically was that with the Mahad unit commissioning, the company will be able to offer a much larger bouquet or, in a sense, could emphasize more on the premium segment offering, so to say.”

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Risks & concerns — 13 flagged

Grasim also won the “Master of Risks – Conglomerate” award in the Large Cap category at the India Risk Management Awards 2025.

— Himanshu Kapania

And at the same time, pulp prices have also started to soften.

— Pavan Jain

And what is the product segment mix in terms of are you strong in, of course, East, you've probably not yet had a plant, so it will be weak.

— Percy Panthaki

Given this macro slowdown that we are seeing, and the seasonality in the H2, which if we annualize over time, how do we intend to reach that target in terms of top line because a lot of distribution and initial excitement about the brand is already that we are seeing in the quarterly run rate?

— Praful Kumar

— Rakshit Hargave

Right now, what is happening is because of the entire tariff situation, the global flows are very uncertain.

— Jayant Dhobley

Because I am seeing that there has been a pressure on CSF prices.

— Sanjeev Kumar Singh

So, does it mean that all the benefits are being passed on by global players also because of the weak demand situation?

— Sanjeev Kumar Singh

So, there is a demand slowdown in the China market.

— Pavan Jain

And while it will be difficult to predict how FY '26 would go, but it could be that FY '26 remains a low single-digit growth here.

— Rakshit Hargave

And while Rakshit did mention there is a slowdown, I believe the slowdown was more led by over focus of industry by downgrading their products.

— Himanshu Kapania

Correspondingly, PVC operating rates outside of India will come under pressure.

— Jayant Dhobley

Correspondingly, supply of caustic in the international market will also come under pressure.

— Jayant Dhobley

Q&A — 11 exchanges

Congratulations for the excellent performance and hitting the targeted market share that you indicated in the last call. Two things I wanted to understand, one, on the dealer counts, if you could highlight what would be at the exit of March '25. And how do you see that over the next, say, 3 years reaching bigger counts? That's my first question.

Rakshit Hargave

Like we said, our objective was to hit 6,000-plus towns and try and track close to 50,000 dealers at the end of the first year. So, we are close to where we had targeted. And in terms of how we look at it in the next couple of years, there is scope for more numerical dealer addition, which we believe there are dealers who want to join us. There are also territories, which we have not covered. But also, along with that, we will consolidate on the dealer base that we have created and extract more counter share from them. Sure. And sir, on the comment that 65% of the portfolio is on the premium a

I have a couple of questions on cellulosic business. I remember there was some disruption in third quarter. However, fourth quarter volumes are still much lower versus Q2 levels. Can you please help us explain what's happening over there? That's my first question.

Vadiraj Kulkarni

In terms of our volumes, the demand has been quite stable, except that in quarter 4, we have seen some minor drop in the demand in the Indian market. So, we had to increase our exports. So, we have not lost any capacity. It's more about diverting some of this capacity to export market. Plus, we also had increased certain specialty kind of product because of which there is a certain change in the productivity levels, changeovers, etc. So, there is no significant change in terms of our capacity utilization. Of course, there are certain machines that we take for maintenance on a periodic basis. S

Hi, Rakshit, congrats on reaching 10% market share exit first year. My question is can you give some idea on what would be your targets for exit FY '26 in terms of market share? And can you tell me what is the total number of tinting machines that we have set up as of FY '25 end?

Rakshit Hargave

So, Percy, you know the 10% market share, the double-digit market share that we have shared is the consolidation between Birla Opus and the Putty business of Birla White. All the paint companies also have putty, but Opus by itself doesn't have. So that is what we have given. Now like I said, we are not giving a guidance or a target for next year. But Birla Opus by itself should be a double-digit share player is what our aspiration is. And whenever you add putty on to it, it will obviously be incremental. Secondly, on the number of tinting machines, we have a good tinting machine penetration. S

My question first was in the paints segment related to premium segment and then the overall EBITDA losses. Now our understanding basically was that with the Mahad unit commissioning, the company will be able to offer a much larger bouquet or, in a sense, could emphasize more on the premium segment offering, so to say. And in that context, I also had an observation that amongst the large competitors, premium segment contributes over 50% of EBITDA. So, first of all, is that a fair understanding that premiumized, premium or those premium segment from Mahad plant will be the niche offering or the

Rakshit Hargave

So, Navin, I would like to correct each of your statements. Directionally, you might be hinting us the right thing. But number one, Mahad is making the same product, which is being made at all the other factories. So Mahad is not adding anything new. My understanding is when you use the word premium, you basically mean in paints, there is a luxury segment, there is a premium segment and there is an economy segment. I assume that you mean both the premium and luxury segments, right? Am I correct? Yes. So, if that is correct, Mahad has not added anything new. Mahad only gives us great geographic

Sir, many congratulations on a great Birla Opus performance. Just one question. When we launched the brand, we had a ₹10,000 crore top line in 3 years' vision. Given this macro slowdown that we are seeing, and the seasonality in the H2, which if we annualize over time, how do we intend to reach that target in terms of top line because a lot of distribution and initial excitement about the brand is already that we are seeing in the quarterly run rate?

Rakshit Hargave

So, the ₹10,000 crore guidance within 3 years of full-scale operations, obviously, it takes into account that 3 years is a long period, and you will have periods of some slowdown and periods of growth. As far as we are concerned, we are absolutely positive that the medium-term outlook will improve while the market has been slow. So, I think a couple of quarters here and there doesn't bother for us because the outlook for India is going to be bright. So, we don't really bother, and we also managed to that. Fair enough. And sir, second question is on the pricing. Given the leader is obviously yo

I have two questions on the chemical side. Sir, first is like when we see two bigger players putting up their caustic chlorine plant for captive chlorine requirement and existing players also putting up the downstream chlorine plants, is it a possibility that industry dynamics would change over a period in terms of chlorine pricing improving on the positive side, your thoughts here? And, ex of pipeline, what is our chlorine consumption internally? And how this ratio would look like once our CPVC and ECH plants are commissioned?

Jayant Dhobley

So, a couple of things. Look, India, as you know, is a country with a very strong domestic consumption growth, right? So, you can do a calculation roughly 700 to 1,000 TPD per year is the organic growth of the industry as far as caustic is concerned, right? So domestic growth in India is going to grow strong. You know all the macroeconomic indicators. So, I think the first point I want to make is whatever excess capacity or new capacity comes into India will be absorbed by the Indian market through its natural growth, right? So that's the first point. Second point, as you correctly mentioned,

Congratulations for a great set of numbers. So, my question is also regarding the chemicals division. If you could just throw some light on the capacity utilization of the epoxy plant and what was the bifurcation into your liquid epoxy and the value-added product, that would be my first question?

Jayant Dhobley

I will continue to maintain that we have a high market share. We have exclusive dealers. We continue to maintain our share and we continue to grow our share. Understood. And what was the negative chlorine realization for the quarter and for the year? So, chlorine realization last quarter was not so great, right? At the lowest, I think you'll touch like minus ₹9,000 or something. However, it is showing an improvement trends. And for full year, sir? For the full year, negative chlorine realization was in the range of about ₹6000 to ₹7000, I won't quote an exact number, but in that range.

My first question is on the paint business. So, we have given in the investor presentation that B2B e-commerce annualized revenue run rate was around ₹50 billion in this quarter. So, does it mean that there, the revenue was closer to ₹12.5 billion, ₹13 billion and this was from the paint revenues? Also, if we exclude the putty business, then is our market share closer to 7.5%, 8%? And would you like to set some interim target for losses? So, we have said that we will be profitable when we reach the revenue of ₹1,000 crores. Does it mean that we should look a situation that we: will be EBITDA b

Rakshit Hargave

So, I think you talked about the revenue of B2B e-commerce business. But the Birla Opus is separate and our B2B business is separate. So, I'll focus on the Birla Opus part. So, on the Birla Opus part, we said that the market share of the putty business and the Birla Opus paint business put together is in double digits. And like we said, Birla Opus by itself is in high single digits. So, you can work backwards as you feel like, but the number will come in the same ballpark in which you're talking about. As far as profitability is concerned, we said our ambition is to be ₹10,000 crores full scal

My first question is on both VSF and Chemical. Firstly, VSF, we have ended this quarter at like a 7, 8 quarter low unit EBITDA per kg for the segment. With the declining prices for both pricing in the top line and cost, as you said, so you're looking at even weaker performance like in first half FY '26 or like is this the bottom of 8 quarters, which we have made like in Q4? And in Chemical business, I had a question, like we have now hit 1.5 million capacities there. So do we expect to grow double the industry growth in FY '26 or like in line industry growth at like probably 5% to 7% because t

Pavan Jain

So, on the VSF profitability, as Mr. Vadiraj has already shared in the last question that there is kind of uncertainty because of these tariff issues globally, I mean, different countries playing out that tariff issues. So, there is a demand slowdown in the China market. So, to that extent, yes, there will be a weakness. We don't give the guidance for FY '26 kind of profit numbers. We have given you the macro kind of situation. But as the tariff uncertainties situation has a better clarity about, I mean, how the sale is going to pan out, I think we will have to, till then, we will have to wait

My question is on the paint sector. Just want to understand as we are in FY'26, given the current demand scenario and also the competitive landscape, from your lens, how do you see FY'26 panning out from a growth perspective? And also, is there a need for us to embrace higher discounting this year versus what we have done last year? That's my question.

Rakshit Hargave

Sheela, if you look at it from a year which has gone by point of view, if you exclude Birla Opus, then the market has actually been negative. So, the market has actually been negative. And if you add Birla Opus, then the market has been positive in low single-digit numbers. What we see today is that the market is still slow. And while it will be difficult to predict how FY '26 would go, but it could be that FY '26 remains a low single-digit growth here. Obviously, the basis for last year is also low, so that could be slightly different. Now whether you need to do price discount is a strategy w

Sir, my question is on the chlor-alkali business. So, in the earlier question, you alluded about the chlorine situation being on the long side. Given that the chlorine will be captively consumed for PVC by the new players and there will be long on the caustic side, what's your perspective in terms of the ECUs, whether structurally the ECUs will be closer to, say, 30-plus prices or there is a possibility that the current kind of ECUs and slightly improving trend, we will be able to see even after those capacities come in?

Jayant Dhobley

Your question is very similar to the question that Nirav had asked. So, I'll give a similar reply. Remember, the pricing of caustic in India is set by import parity. Similarly, pricing of PVC in India is set by import parity. Now when these large PVC players come in, it's not going to change India's demand significantly, right? There will be a substitution potentially of imported PVC by Indian PVC. Correspondingly, PVC operating rates outside of India will come under pressure. If you study the markets in North Asia, you will realize which are the higher cost PVC producers. Correspondingly, sup

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Speaking time

Rakshit Hargave

Moderator

Jayant Dhobley

Himanshu Kapania

Amit Purohit

Vadiraj Kulkarni

Navin Sahadeo

Shreya Banthia

Sanjeev Kumar Singh

Pavan Jain

Opening remarks

Ankit Panchmatia

A very good morning to everyone, and on behalf of Grasim Industries, I would like to welcome all of you to our Fourth Quarter Financial Year 2025 results and business performance discussion. I hope you have got a chance to refer to our results, presentation and press release uploaded on our website and exchanges. Before we begin, I would just want to draw your attention to the disclaimer statement, which is covered in the last slide of our presentation. Let me now introduce you to our management team present here with us on the call. We have with us Mr. Himanshu Kapania, Managing Director, Grasim Industries and Business Head Birla Opus, our Paints business; and Mr. Pavan Jain, Chief Financial Officer, Grasim Industries. We also have with us Mr. Jayant Dhobley, Business Head Chemicals, Fashion Yarn, and Insulator business; Mr. Vadiraj Kulkarni, Business Head, Cellulosic Fibres business; Mr. Rakshit Hargave, CEO, Birla Opus, our Paints Division; and Mr. Sandeep Komaravelly, CEO Birla Piv

Himanshu Kapania

Good morning or good evening to all the participants who have joined this call from different geographies. I welcome you to Grasim Industries Quarter 4 FY '25 Investor Call. It's an honour to be chosen as the Managing Director of Grasim Industries. Originally a textile company, Grasim Industries has charted an extraordinary path of growth, innovation, and diversification over the last 78 years to become India's premier conglomerate with strong presence in textiles, chemicals, building materials and other industries. I joined the Aditya Birla Group in the telecom business in 1997. At that stage, the group was US$2 billion in revenue and dollar conversion was ₹36, with presence in textile, aluminum and start of cement, telecom, fashion, financial services, and other businesses. In the last 28 years under the leadership of Mr. Kumar Mangalam Birla, the group revenue has risen to US$66 billion, and the dollar conversion is ₹85, thereby growing by 33 times at constant currency. This superla

Pavan Jain

Thank you, Himanshuji, for giving a detailed business review on the new businesses in the year gone. I would like to add that our established core businesses namely cement, cellulosic fibres and chemicals continue to deliver strong performance with market leadership across businesses, delivering quality products to meet customer requirements and healthy cash flows, the core businesses provide both stability and strategic leverage. Some achievements in the year gone by in respect to our core businesses are: Number one, cellulosic fibre has achieved highest ever revenue, annual revenue of ₹15,987 crores, growth of 6% Y-o-Y primarily led by volume growth of 4%. However, the profitability of this business during the year was lower by 12% on a Y-o-Y basis due to higher key raw material prices absorbed by the company partially. In Q4 and entering Q1, slight moderation in China capacity utilization and higher inventory days has resulted correction in global prices of cellulosic fibres. And at

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