Grasim Industries: Business model, Q3 FY25 earnings, promoter details, and shareholding pattern

Grasim Industries Limited, established in 1947, has evolved into a diversified conglomerate with a significant presence across multiple sectors, including viscose staple fibre (VSF), chemicals, cement, financial services, and paints. As a flagship entity of the Aditya Birla Group, Grasim has expanded its operations both domestically and internationally, reflecting its strategic growth and diversification.​

Business Model

Grasim’s business model is structured around several core segments:​

• Viscose Staple Fibre (VSF): Grasim is a leading global producer of cellulosic fibres, supplying to textile manufacturers worldwide. The company emphasizes an integrated approach, ensuring control over the entire value chain from raw material sourcing to fibre production.​

• Chemicals: The company produces a range of chemicals, including caustic soda and chlorine derivatives, serving various industries such as textiles, agriculture, and consumer goods. This segment benefits from backward integration, utilizing outputs from one process as inputs for another, enhancing operational efficiency.​

• Cement: Through its subsidiary, UltraTech Cement, Grasim has become a major player in the cement industry, with a total capacity (India and overseas) reaching 171.2 million tonnes per annum (MTPA) and plans to achieve over 200 MTPA by FY27.​

• Financial Services: Grasim holds a controlling stake in Aditya Birla Capital Limited (ABCL), offering a wide array of financial services, including lending, asset management, and insurance. As of December 2024, ABCL’s total lending portfolio grew by 27% year-on-year to ₹1,46,151 crore.​

• Paints: Entering the paints industry under the brand name ‘Birla Opus,’ Grasim has commenced operations in multiple plants, aiming to establish a strong presence in the decorative paints market. Four out of six planned plants are already operational, with the remaining two expected to commence in the near future.​

Q3 FY25 Financial Performance

For the quarter ending December 31, 2024, Grasim Industries reported the following consolidated financial results:​

• Revenue: ₹34,793 crore, an increase of 9% compared to the same quarter in the previous year.​

• EBITDA: ₹4,668 crore, down 9% year-on-year, primarily due to lower realizations in the cement business and initial investments in the paints segment.​

• Net Profit: ₹899 crore, a decline of 41% from ₹1,514.4 crore in Q3 FY24, attributed to higher interest and depreciation charges related to investments in building materials businesses.​

Segment Performance:

• Cellulosic Fibres: Revenue increased by 6% to ₹3,934 crore, while EBITDA declined by 18% to ₹331 crore, mainly due to higher input costs.​

• Chemicals: Revenue grew by 12% to ₹2,226 crore, with EBITDA rising by 25% to ₹329 crore, driven by improved realizations in caustic soda and better profitability in chlorine derivatives.​

• Building Materials (Cement and Paints): Revenue was up 10% to ₹18,784 crore. However, EBITDA decreased by 14% to ₹2,806 crore due to lower cement realizations and initial expenses related to the paints business.​

Promoter Details and Shareholding Pattern

As of December 31, 2024, the shareholding pattern of Grasim Industries was as follows:​

• Promoters: 43.11%, with Indian promoters holding 38.51% and foreign promoters holding 4.60%.​

• Public Shareholders: 56.58%.​

• Non-Promoter Non-Public Shareholders: 0.31%.​

Notably, the promoter group includes significant entities such as Birla Group Holdings Private Limited (BGHPL), which increased its stake by 4.09% to 23.18% in May 2024 through a scheme of amalgamation.​

Recent Developments

• Expansion in Paints Business: Grasim has launched ‘Birla Opus’ in the decorative paints segment, with four out of six planned plants already operational. The remaining plants are expected to commence operations in Q4 FY25 and Q1 FY26.​

• Investment in Lyocell Fibre Plant: The board approved setting up a 110,000 TPA Lyocell fibre plant at Harihar, Karnataka, with the first phase of 55,000 TPA to be executed by mid-2027 at an investment of ₹1,350 crore. This initiative aims to strengthen Grasim’s specialty product portfolio of eco-friendly fibres.​