Grasim Industries’ Q2 results show a 66% decline in net profit to ₹390 crore, impacted by its renewable business, while revenue rose 11% year-on-year.
Grasim Industries Ltd, the flagship company of the Aditya Birla Group, released its Q2FY25 results for the July-September quarter on Thursday, November 14. The company reported a 66% decline in consolidated net profit, down to ₹390 crore from ₹1,164 crore in the same period last year. The profit dip was attributed to weak demand in the paints division, affected by an unusually heavy monsoon, alongside lower profitability in the cement business and increased interest and depreciation costs linked to investments in the renewable energy sector.
Despite the profit drop, Grasim’s revenue from operations grew by 11% to ₹33,563 crore in Q2, up from ₹30,220.68 crore the previous year. The company credited this revenue growth to strong performances in its Financial Services, Cellulosic Staple Fibre, and Specialty Chemicals businesses.
Grasim Industries reported that its operating profit declined, primarily due to reduced profitability in the Cement business and initial investments in its new Paints division, branded as ‘Birla Opus’. According to a regulatory filing, the company noted that these results are in line with its strategy to establish a strong consumer-focused business. Increased interest and depreciation costs from investments in Building Materials and Renewables also contributed to the profit decline.
As the holding firm for UltraTech, Aditya Birla Capital, and Aditya Birla Renewables, Grasim’s standalone figures do not include earnings from UltraTech Cement and Aditya Birla Capital. The recently launched paints division, Birla Opus, has impacted profit margins as Grasim continues to invest in this new segment.
Additionally, paint manufacturers faced weak demand due to above-average monsoon rainfall across the country during the quarter, which affected sales. Grasim Industries’ total expenses rose by 15.75% in the September quarter, reaching ₹31,993.03 crore. Meanwhile, its total income, including revenue from other sources, grew by 11.31% to ₹33,958.21 crore for the same period.
Grasim’s revenue from its cellulosic fibre business rose by 6.07% in the September quarter, reaching ₹4,125.19 crore, supported by an increase in Cellulosic Staple Fibre (CSF) prices. The CSF business achieved a record-high quarterly sales volume of 219 KT, a 4% year-on-year increase, driven by stable domestic demand. EBITDA margins also improved, benefiting from higher sales volume and a favorable trend in global prices, according to the company.
Grasim Industries reported a 4% year-on-year increase in consolidated cement sales volumes for its UltraTech business, reaching 27.84 million tonnes. However, similar to other manufacturers, it experienced lower realisations. Production is ramping up at three newly commissioned plants for its paints business, Birla Opus, located in Ludhiana, Panipat, and Cheyyar, with trial production now underway at Chamarajanagar and Mahad plants.
The company’s B2B e-commerce business, Birla Pivot, continues to grow steadily, aligning with the plan to reach USD 1 billion in revenue within three years, as announced in FY24. Meanwhile, revenue from Aditya Birla Capital Ltd, Grasim’s financial services segment, rose 33% to ₹10,251.58 crore from ₹7,707.91 crore a year ago. The overall lending portfolio (NBFC and HFC) expanded by 27% year-on-year to ₹1,37,946 crore, and the total AUM (across AMC, life insurance, and health insurance) surpassed ₹5,00,000 crore, showing 24% annual growth.
Revenue from other businesses, which include textiles, renewables, and insulators, increased by 2.13% to ₹777.37 crore. Grasim’s capital expenditure for H1 FY25 stood at ₹1,884 crore, with a planned standalone capex of ₹4,691 crore for FY25, of which ₹3,000 crore is allocated to new growth ventures. The board has also approved a ₹287 crore investment for additional pulp capacity at Harihar and ₹20 crore for the textiles business.
Looking forward, Grasim stated that its broad presence across sectors positions it well to leverage growth opportunities in India’s expanding economy. The company added that the government’s focus on infrastructure, housing, manufacturing, financial inclusion, and boosting prosperity aligns with Grasim’s growth potential.
On Thursday, Grasim Industries’ shares closed 0.79% higher at ₹2,529.55 on the BSE.
