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Grasim Ltd — Q3 FY24
Grasim's Q3 FY24 consolidated revenue grew 12% YoY to INR 31,965 crore, with EBITDA up 34% to INR 5,150 crore, driven by volume growth in VSF (34%) and caustic soda (5%), though realizations remained weak due to global oversupply.
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Grasim's Q3 FY24 consolidated revenue grew 12% YoY to INR 31,965 crore, with EBITDA up 34% to INR 5,150 crore, driven by volume growth in VSF (34%) and caustic soda (5%), though realizations remained weak due to global oversupply. Standalone revenue was INR 6,400 crore (+3% YoY). The paints business (Birla Opus) is on track for launch in Q4 FY24 with trial production at three plants, targeting pan-India distribution by FY25 end. B2B e-commerce Birla Pivot achieved INR 120 crore monthly revenue run-rate. VSF margins are expected to bottom out, while chemicals remain stable to gently improving. Risks include continued pressure from cheap Chinese imports and Red Sea disruptions impacting export trade.
ग्रासिम की तीसरी तिमाही में कुल कमाई 12% बढ़कर 31,965 करोड़ रुपये हो गई। मुनाफा (EBITDA) 34% बढ़कर 5,150 करोड़ रुपये रहा, जिसकी वजह वीएसएफ (34%) और कास्टिक सोडा (5%) की ज्यादा बिक्री है। हालांकि, दुनिया भर में ज्यादा आपूर्ति के कारण कीमतें कमजोर रहीं। अकेले ग्रासिम की कमाई 6,400 करोड़ रुपये (+3%) थी। पेंट का कारोबार (बिरला ओपस) चौथी तिमाही में शुरू होगा, तीन कारखानों में परीक्षण उत्पादन चल रहा है। मार्च 2025 तक पूरे भारत में बिक्री शुरू करने का लक्ष्य है। बी2बी ई-कॉमर्स बिरला पिवट की मासिक कमाई 120 करोड़ रुपये हो गई। वीएसएफ का मुनाफा अब नीचे नहीं गिरेगा, रसायन स्थिर या थोड़े बेहतर रहेंगे। जोखिम: सस्ते चीनी आयात और लाल सागर में गड़बड़ी से निर्यात प्रभावित हो सकता है।
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Cheap Chinese imports impacting VSF realizations
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VSF Volume Growth
34%
+34% YoY
VSF volumes grew 34% YoY, driven by normalization after a weak Q3 FY23.
Chlorine Integration
63%
+7pp YoY
Chlorine integration improved to 63% from 56% YoY, targeting 70% post expansions.
Birla Pivot Monthly Revenue Run-Rate
INR 120 Cr
+20% QoQ
B2B e-commerce platform crossed INR 120 crore monthly revenue run-rate in December 2023.
Paints Capacity Under Trial
630M Liters
New
Three plants with cumulative 630 million liters capacity are under trial production.
What Changed vs Last Quarter
NEW
Net debt-to-EBITDA to reach 3-3.5x post paints capex
Management guided net debt-to-EBITDA of 3-3.5x after completing paints capex and rights issue proceeds.
NEW
Capex guidance of INR 5,900 crore for FY24
Management reiterated plant capex guidance of about INR 5,900 crore for FY24, with 76% allocated to paints.
UPDATED
Paints launch in Q4 FY24 with pan-India distribution by FY25 end
Birla Opus will launch in Q4 FY24 starting with North and South India, targeting national distribution by end of FY25.
DROPPED
Epoxy capacity expansion commissioning in Q3 FY24
The expanded epoxy capacity is under commissioning and expected to be operational in Q3 FY24.
DROPPED
Renewables capacity of ~1 GW to be commissioned by Q1 FY25
Projects under implementation of about 1 GW are expected to be commissioned by next year's first quarter.
DROPPED
Debt-to-EBITDA not to exceed ~3.5x
Even with full paints CapEx next fiscal, debt-to-EBITDA is not expected to cross about 3.5x.
NEW RISK
Cheap Chinese imports impacting VSF realizations
VSF realizations declined 2% QoQ due to cheaper imports from China, pressuring margins.
NEW RISK
Red Sea disruptions affecting global trade
Red Sea disruptions are impacting 12-15% of world trade, including 30% of container traffic, creating uncertainty for export markets.
NEW RISK
Chlorine pricing remains negative due to agrochem slowdown
Chlorine realizations worsened by INR 2,000 sequentially to negative INR 4,000, driven by slow agrochem demand.
NEW RISK
Paints business losses increasing ahead of launch
Paints EBITDA losses increased QoQ as uncapitalized expenses rise; profitability timeline remains uncertain.
RISK GONE
Sustained global textile demand weakness
International brands continue to hold elevated inventories, suppressing demand for VSF and VFY; recovery timeline remains uncertain.
RISK GONE
Volatile input costs
Caustic soda, sulfur, coal, and oil prices are volatile; recent stabilization and upticks could pressure margins.
RISK GONE
Paints business profitability impact
Initial costs from paints business are being charged to P&L, with losses expected to persist until commercial launch and scale-up.
RISK GONE
VFY pricing pressure from Chinese imports
Anti-dumping duty on VFY is only at DGTR recommendation stage; Chinese imports continue to pressure domestic prices due to low domestic consumption in China.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24
International brands continue to hold elevated inventories, suppressing demand for VSF and VFY; recovery timeline remains uncertain.
Mentioned in Q1 FY24, Q2 FY24
Anti-dumping duty on VFY is only at DGTR recommendation stage; Chinese imports continue to pressure domestic prices due to low domestic consumption in China.
Fast read
Guidance and risk preview
Birla Opus will launch in Q4 FY24 starting with North and South India, targeting national distribution by end of FY25.
VSF realizations declined 2% QoQ due to cheaper imports from China, pressuring margins.
View Risks →