Grasim Industries Ltd Share Price – NSE  /  BSE

Textiles, Mid Cap

The rise in the revenue was mainly driven by the performance of key subsidiaries.

Profit before tax was at Rs 2,862 crore in the September quarter, registering a growth of 21.46% year on year (YoY).

EBITDA jumped 19% to Rs 4,509 crore in Q2 FY24 as against Rs 3,783 crore posted in Q2 FY23. EBITDA margin improved to 15% in Q2 FY24 as compared to 14% recorded in the same period last fiscal.

Grasim Industries said that its viscose staple fibre (VSF) volumes grew by 24% YoY and over 12% QoQ to reach 210KT. The Viscose business reported revenue of Rs 3,889 crore and EBITDA of Rs 468 crore for Q2 FY24, making sequential increase of 9% and 20% respectively. EBITDA margins improved on the back of higher sales volume and a reduction in input prices. However, the viscose filament yarn (VFY) business margins faced pressure as China’s aggressive pricing policy led to necessary price adjustments in the domestic markets.

The company’s revenue from the chemicals business was at Rs 1,988 crore, down 7% QoQ and 27% YoY, primarily due to lower caustic soda realisations. EBITDA stood at Rs 236, down 34% QoQ and 61% YoY.

Caustic soda sales volume increased 5% QoQ and 3% YoY to 306KT in Q2FY24. ECU for the quarter stood at Rs 32,008/MT, down 8% QoQ and 35% YoY. Speciality chemicals (epoxy polymers and curing agents) business margins were impacted by lower realisations as compared to Q1 FY24.

International caustic soda spot prices (CFR SEA) remained relatively stable at around $417/ton in Q2FY24 ($415/ton in Q1FY24). Prices declined to $383/ton in July 2023, but recovered later in the quarter, reaching $470/ton in September 2023.

Textiles business has reported revenue of Rs 560 crore and EBITDA of Rs 41 cror. A sharp increase in flax fibre prices has impacted profitability of the linen business.

In paints business, Grasim stated that it has announced “Birla Opus” as the brand name for the paints business. The sub-branding and marketing strategies are progressing according to the estimated timelines. The firm has received consent to operate plants at three locations; Panipat, Ludhiana and Cheyyar. During the quarter, the company launched a painting service offering under the name “PaintCraft” across 8 major Indian cities.

The total capex outlay for Q2FY24 stood at Rs 1,650 crore, of which Rs 1,269 crore was for paints business.

The board has approved a capex of Rs 144 crore for different businesses and has approved rephasing of spending of earlier approved capex entailing additional spend of Rs 138 crore in current financial year. The budgeted spend for FY24 stands revised at Rs 5,929 crore.

Grasim Industries, a flagship company of the Aditya Birla Group, is a leading diversified player with leadership presence across many sectors. It is a leading global producer of viscose staple fibre and viscose filament yarn, the largest chlor-alkali, advanced material, linen yarn and fabrics producer in India. The company recently has entered paints business and setting up six plants across pan India locations.

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Net profit of Grasim Industries rose 15.32% to Rs 1163.75 crore in the quarter ended September 2023 as against Rs 1009.17 crore during the previous quarter ended September 2022. Sales rose 9.95% to Rs 30220.68 crore in the quarter ended September 2023 as against Rs 27485.54 crore during the previous quarter ended September 2022.

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Grasim Industries will hold a meeting of the Board of Directors of the Company on 13 November 2023.

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The proposed of rights issuance by the company aims to fund the ongoing capital expenditure plan, repay existing borrowings, and support general corporate purposes. In its transformational growth journey, Grasim is implementing its highest ever capital expenditure plan.

The company has raised debt to part fund the on-going capital expenditure plan and the funds raised by this issue will also be largely used towards growth capex. The capital outlay for the company to establish itself as India's second largest decorative paints player is on track. The company is committed to sustaining market leadership in its core businesses Viscose and Chemicals (at Standalone level). The rating agencies continue to reaffirm Grasim's 'AAA' ratings.

The rights issue will enables existing shareholders to participate in Grasim's growth journey. The Promoters and Promoter Group have confirmed their participation. They will fully subscribe to their rights entitlement and also to the unsubscribed portion, if any, demonstrating their deep conviction in Grasim's growth prospects.

Grasim Industries, a flagship company of the Aditya Birla Group, is a leading diversified player with leadership presence across many sectors. It is a leading global producer of viscose staple fibre and viscose filament yarn, the largest chlor-alkali, advanced material, linen yarn and fabrics producer in India. The company recently has entered paints business and setting up six plants across pan India locations.

The Aditya Birla Group company's consolidated net profit declined 18.46% to Rs 1,576.47 crore in Q1 FY24 as against Rs 1,933.39 crore recorded in Q1 FY23. Revenue from operations grew by 10.78% year on year to Rs 31,065.19 crore in the quarter ended 30 June 2023.

The shares of Grasim Industries rose 0.14% to Rs 1,974.75 on the BSE

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