Grasim Ltd -Research Report

About the Company:

Grasim Industries Limited, a flagship company of the Aditya Birla Group, ranks amongst the top publicly listed companies in India. Incorporated in 1947, it started as a textiles manufacturer in India. Today, it has evolved into a leading diversified player with leadership presence across many sectors. It is a leading global producer of Cellulosic Fibres, Diversified Chemicals, Fashion Yarn and Fabrics producer in India. Implementing next phase of transformational growth journey, the company has entered paints business under the brand name ‘Birla Opus’. Out of the six plants to be set-up for manufacturing decorative paints across pan India locations, five plants have commenced operations. Leveraging the Group synergies, Grasim has launched ‘Birla Pivot’, the B2B online marketplace for building materials. Through its subsidiaries, UltraTech Cement, Aditya Birla Capital and Aditya Birla Renewables, it is also India’s prominent cement producer, leading diversified financial services player and clean energy solutions player.

Business Segments:

1. Building Materials: Under building materials segment, company operates in 3 industries which includes Cement, Decorative paints and B2B e-commerce.

• Cement: The company through its subsidiary Ultratech Cement offers Grey Cement, White Cement putty, and Ready Mix Concrete, under the brands Ultra-Tech Cement & Birla White. Ultra tech cement is India's largest manufacturer of cement and the world's 3rd-largest cement producer outside China, with a total production capacity of 171.2 MTPA, and plans to achieve a capacity of 200+ MTPA by FY27.
• Decorative Paints: The company’s brand Birla Opus offers a range of decorative paints including Interior and Exterior Paints, Waterproofing, Enamels, and Wood Finishes. It has become 2nd Largest Player in Indian Decorative Paints Industry. Company has also portfolio of 179 products and 1,460+ SKUs, featuring first-ever innovations like scuff-resistance, superior coverage, spatter-proofing, & high gloss. Total capex spent stood at ₹9,555 Cr. as on 30th June 2025 out of total allocated capex of Rs. 10,100+ Cr to develop 6 integrated plants with a total capacity of 1,332 MLPA. The company is also expanding the reach to 8,000+ towns on pan-India basis.
• B2B E-Commerce: Birla Pivot, the B2B e-commerce business unit of the company was launched in 2023, to offer a range of building materials, including cement, steel, tiles, doors & paints to plumbing, Hardware, Kitchen Appliances, etc to MSMEs. It has expanded offerings across 35 product categories comprising 40,000+ SKUs sourced from 300+ National and Regional brands and aims to achieve a revenue of $1 Bn by FY27.

2. Financial Services : Aditya Birla Capital Ltd (ABCL), the financial services arm of the company, offers a suite of financial products across financing, protecting, investing and advisory services. It has a digital presence via platforms like ABCD Application which has 6.4 million+ customers and Udyog Plus with ~2.4 million registrations and total portfolio of ~₹3,658 Cr. and an offline presence across 1,474 branches with a lending book of Rs. ₹1,65,832 as of Q1Fy26.
3. Cellulosic Fibres: The company produces Cellulosic Staple Fibre (CSF) and Cellulosic Fashion Yarn (CFY) and markets it under various brands like Liva, Spunshades, Raysil, etc. It is the largest producer of CSF with a capacity of 842 KTPA, and a prominent manufacturer of CFY in India, with an annual capacity of 51 KTPA. It has indigenously developed 2nd and 3rd generation fibers, like Birla Modal and Birla Excel (Lyocell). Company has 6% share of Cellulosic Fibresin Textiles fibre basket. In Q3 FY25, the board approved setting up a 110K TPA Lyocell plant, with the 1st phase of 55K TPA for Rs. 1,350 Cr to be completed in the next 2 years. Phase 1 of the Lyocell project of 55 KTPA (total capacity 110 KTPA) progressing as per plan, commissioning targeted by mid-2027.

The company also have partnership with LNJ Bhilwara Group to develop graphene technology for textiles and collaboration with US-based Circ to enhance textile fiber recycling.

4. Chemicals: Under Chemicals segement company offers 3 products which includes Chlor-Alkali, Speciality chemicals and Chlorine Derivatives.

• Chlor-Alkali: The company is the largest Chlor-Alkali producer in India, with a capacity of 1,500 KTPA, and plans to add 25 KTPA by FY26. Maintaining Market leadership position in Chlor-Alkali business with capacity of 1.5 Million MTPA.
• Chlorine Derivatives: The company produces a range of chlorine derivatives catering to high growth markets such as Pharma, Agrochemicals, Water Treatment, Food & Feed, Plastic Additives, Industrial, etc. It has presence in high value speciality products such as Chloromethanes and Phosphoric Acid. Company’s Lubrizol CPVC Resin Project for Phase I of 50 KTPA (of total 100 KTPA) and Epichlorohydrin (ECH) 50 KTPA Plant construction at Vilayat progressing well, mechanical completion by Q3FY26. Chlorine Integration to reach 70% post commissioning of the ongoing projects. It has a capacity of 1,029 KTPA and plans to add 139 KTPA by Q1 FY27. 
• Specialty Chemicals: It is India's leading producer of specialty chemicals, including Epoxy Polymers and Curing Agents, with a production capacity of 246 KTPA serving growing end-use markets such as Construction Chemicals & Coatings, Renewables and Electricals & Electronics. The company is also considering doubling its Epoxy capacity by integrating an ECH facility.

5. Others: The company also has a textiles division offering linen, wool, and cotton, under brands like Linen Club, Soktas, etc. It also manufactures ceramic and composite insulators and is engaged in renewable energy generation.

Fundamentals:

CMP	2782
52 - week high / low	Rs.  2,912 / 2,276
Dividend % (consolidated)	0.36%
ROE	3.95%
BV(Rs.)	1,433
Sales (Rs.)	1,53,327 Cr.
Debt to Equity	1.91
P/E ratio	44.8
EPS (consolidated)	Rs. 61.2
P/B ratio	1.92
Market Cap (Rs.)	1,87,061 Cr.
Face value (Rs.)	2
PEG Ratio	-2.13
EVEBITDA	11.3

 

 

Financial Results:

In Q1Fy26 company reported revenue of Rs. 40,118Cr. up by 15.91%, EBITDA of Rs. 6430Cr. up by 35.65% and PAT of 1419Cr. up by 32% compared to Q1Fy25 on YoY basis.

On segmental front, Cellulosic fibre business’ Revenue grew by 7% YoY but EBITDA dropped by 20% YoY. CFY volumes grew by 6% YoY, however low-priced imports continue to impact realisations

Company’s Chemicals business Revenue up by 16% YoY and EBITDA up by 36% YoY. Domestic caustic sales volume up by 8% YoY led by stable domestic demand scenario and Specialty Chemicals sales volume up by 6% YoY but profitability was down due to higher input prices.

Cement business’ Consolidated volume grew by 9.7% YoY to 36.8 million tons (incl. India Cements). Company’s Domestic grey cement sales volume grew 8.7% YoY to 34.6 million tons and its Domestic operating EBITDA/ton grew by 37% YoY at ₹1,248 led by lower logistics, fuel & power costs. Ready Mix Concrete (RMC) volume grew by 20% YoY to 3.9 Mn m3 , total 397 plants spread across 158 cities. Premium product mix stood at 33.8%, up 41% in YoY. UltraTech Building Solutions (UBS) outlets increased to 4,802, contributing 21% of total domestic grey sales volume. Green Power Mix has increased to 39.5% vs. 27.9% in Q1FY25. Reached 1.08 GW of renewable power capacity and 363 MW of WHRS power.

Financial services business’ Total Lending portfolio (NBFC and HFC) grew by 30% YoY to ₹1,65,832 Cr and Total AUM (AMC, life and health insurance) increased by 20% YoY to ₹5,53,504 Cr. Revenue grew by 8% YoY at ₹9,488 Cr and All segments reported consistent growth: NBFC up by 13% YoY, Housing Finance grew by 65% YoY, Life Insurance grew by 2% YoY and Health Insurance grew 31% YoY. Its PAT grew by 12% YoY at ₹803 Cr.

Other businesses, Revenue grew by 8% YoY to ₹865 Cr., while EBITDA grew by 41% YoY to ₹154 Cr., led by higher capacities in renewable business. Company’s Renewables business revenue grew by 54% YoY to ₹192 Cr. and EBITDA grew by 66% YoY to ₹146 Cr. (including treasury income of ₹21 Cr.), The cumulative installed capacity increased to 1.9 GWp, of which 43% is with Group companies. Textiles business revenue stood at ₹547 Cr. with EBITDA of ₹9 Cr. against EBIDTA loss of ₹8 Cr. in Q4FY25.

Conclusion:

Grasim Industries is positioning itself at the center of India’s next consumption and infrastructure boom. Its entry into the decorative paints business under the Birla Opus brand marks a bold step into a high-growth sector that is expected to expand rapidly on the back of urbanization, housing demand, and rising disposable incomes. With most of its planned plants already operational, the company is well placed to challenge established incumbents in the years ahead.

Beyond paints, Grasim’s launch of Birla Pivot—a digital B2B marketplace for building materials—signals a forward-looking approach to capturing value across the entire construction ecosystem. By leveraging group synergies, the company is not only manufacturing materials but also creating platforms that integrate supply chains and improve accessibility for builders and contractors.

The competitive landscape, however, is intensifying. New entrants and consolidation move by established players suggest that market share will not come easily. Grasim’s success will depend on how effectively it can scale distribution, build brand strength, and manage cost pressures in a sector where raw material volatility and regulatory changes are constant realities.

Even so, its diversified portfolio spanning cement, chemicals, financial services, and renewables offers both resilience and long-term growth optionality. For investors, Grasim represents more than just a single-sector bet—it is a play on India’s broader consumption and infrastructure cycles. The coming years may well define whether its transformation into a multi-sector powerhouse translates into sustained shareholder value.

HET ZAVERI
info@smartinvestment.in

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