Grasim Industries Limited , a flagship company of the Aditya Birla Group, has reported mixed financial results for the second quarter, with its paints business, Birla Opus, achieving a significant milestone in capacity expansion.

Financial Performance

For Q2, Grasim reported:

• Consolidated revenue of ₹39,900.00 crore, up 17% year-over-year (YoY)
• EBITDA of ₹5,217.00 crore, a 29% increase YoY
• Net profit attributable to owners at ₹553.00 crore, up 76% YoY

The company's performance was driven by robust growth in its Building Materials and Chemicals businesses, while the Cellulosic Fibres segment faced some challenges.

Segment-wise Performance

Cellulosic Fibres

• Revenue grew marginally by 1% YoY to ₹4,149.00 crore
• EBITDA decreased by 29% YoY to ₹350.00 crore, impacted by higher input costs

Chemicals

• Revenue increased by 17% YoY to ₹2,399.00 crore
• EBITDA rose by 34% YoY to ₹365.00 crore, driven by higher volumes in Chlorine Derivatives and improved ECU realizations

Building Materials

• Revenue grew by 28% YoY to ₹22,253.00 crore
• EBITDA surged by 55% YoY to ₹2,950.00 crore, anchored by strong performance in the Cement business

Birla Opus Paints Expansion

A significant highlight of the quarter was the expansion of Grasim's paints business, Birla Opus. With the commencement of commercial production at its Kharagpur plant on October 15, Birla Opus has achieved a total installed capacity of 1,332 Million Litres Per Annum (MLPA). This expansion marks the completion of all six green-field plants, positioning Birla Opus as the second-largest player in the Indian Decorative Paints market with an industry capacity share of approximately 24%.

Management Changes

Grasim Industries informed that Mr. Rakshit Hargave, CEO of Birla Opus Paints, has decided to pursue opportunities outside the company. His last working day will be December 5. Mr. Himanshu Kapania, Managing Director of Grasim Industries, will oversee the Paints business in the interim.

Outlook

Grasim Industries remains optimistic about its diverse portfolio and strategic investments across core sectors. The company is well-positioned to benefit from India's economic momentum, particularly in infrastructure expansion, domestic manufacturing growth, and rising disposable incomes.

As Grasim continues to scale its operations, particularly in the paints segment, investors will be watching closely to see how these investments translate into long-term growth and profitability for the company.

Grasim Industries Limited , a flagship company of the Aditya Birla Group, has reported no deviation in its rights issue fund utilization, announced strategic moves to bolster its renewable energy portfolio, and approved a new stock option grant for employees.

Employee Stock Option Grant

Grasim Industries Limited's Nomination and Remuneration Committee has approved the grant of 2,668 stock options to eligible employees under the Grasim Industries Limited Employee Stock Option and Performance Stock Unit Scheme 2022. The grant comprises:

• 2,407 stock options priced at Rs. 2,882.00 per option (based on market price)
• 261 Performance Stock Units (PSUs) priced at Rs. 2.00 per unit

Key details of the grant include:

• Stock options will vest 33% each over three years starting one year from the grant date
• PSUs will vest 100% after three years
• Stock options can be exercised within five years of vesting
• All options and PSUs are subject to performance conditions
• The scheme is implemented through the Grasim Employees Welfare Trust and complies with SEBI regulations

Rights Issue Fund Utilization

Grasim Industries Limited submitted its monitoring agency report for the quarter ended September 30, showing no variation or deviation in the utilization of funds from its rights issue. CARE Ratings Limited, serving as the monitoring agency, confirmed that the company properly utilized the proceeds from its ₹3,999.80 crore rights issue conducted in January.

Key details of the rights issue include:

• 2,20,73,935 equity shares offered at ₹1,812.00 per share
• Subscription rate of 1.97 times
• Allocation of ₹3,000.00 crore for repayment of borrowings
• ₹977.65 crore allocated for general corporate purposes

During the quarter, funds were utilized for:

• Repayment of commercial paper worth ₹967.26 crore
• Salaries of ₹3.20 crore

An unutilized amount of ₹0.44 crore remains in the monitoring bank account with Axis Bank.

Renewable Energy Expansion

The Board of Directors of Grasim Industries has approved the acquisition of 26% equity stakes in three Special Purpose Vehicles (SPVs) for renewable energy projects. These SPVs are being formed in collaboration with Prozeal Green Energy Limited and GMR Energy Limited. The projects aim to establish captive wind-solar hybrid power generation facilities, each with an approximate capacity of 50MW.

The acquisitions include:

1. Pro-Zeal Green Power Eighteen Private Limited for the Vilayat Plant in Gujarat
2. A to-be-formed SPV with Prozeal Green Energy Limited for the Balabhadrapuram Plant in Andhra Pradesh
3. A to-be-formed SPV with GMR Energy Limited for the Ganjam Plant in Odisha

These strategic investments, involving cash considerations with equity investments up to ₹3.60 crores in tranches, are designed to meet the company's green energy needs and optimize energy costs.

Leadership Change in Paints Division

In a separate development, Rakshit Hargave, CEO of Birla Opus Paints, has resigned from his position to pursue opportunities outside the company. Hargave, who joined Grasim Industries in November 2021, played a crucial role in the startup phase of the Decorative Paints business and its initial scaling up.

During his tenure, Hargave contributed significantly to:

• Establishing six integrated manufacturing facilities
• Scaling distribution and supply chain networks nationwide
• Building a high-performing team

The Board of Directors has accepted Hargave's resignation, effective from the close of business hours on 5th December. In the interim, Himanshu Kapania, Managing Director of Grasim Industries, will directly oversee the Paints business until a successor is announced.

Company's Performance

For the quarter ended September 30, Grasim Industries reported a loss of ₹118.18 crore on a standalone basis. However, the company's diversified portfolio, spanning Cellulosic Fibres, Chemicals, Building Materials, and Financial Services, continues to drive growth.