Grasim Industries Q2 net profit slumps 66% to Rs 390 crore

Aditya Birla Grasim

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26 Aug, 2025 12:21

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Grasim Industries on November 14 reported a 66 percent fall in its consolidated net profit to Rs 390 crore in the second quarter, compared with Rs 1,164 crore in the last year quarter, amid lower realisations from cement sales and planned investments in the paints business, under the Birla Opus brand.

The company reported a revenue of Rs  33,562.85 crore, up 11.1 percent YoY in the quarter ended September 30, driven by the superior performance of financial services, cellulosic staple fibre and specialty chemicals businesses.

On a standalone basis, net profit declined 9 percent to Rs 720.86 crore while revenue from operations increased 18 percent to Rs 7,623.33 crore. The standalone results exclude the performance of Grasim's subsidiaries like UltraTech Cement and Aditya Birla Capital.

Analysts had expected revenue from operations to see a year-on-year (YoY) rise of 17-20 percent and net profit to likely rise by 18 percent YoY, according to estimates from three brokerages.

Consolidated EBITDA decreased by 10 percent to Rs 4,042 crore, primarily due to reduced profitability in the cement segment and initial investments in the Paints business under the 'Birla Opus' brand.  Nearly all brokerage houses are cautious on the cement sector, as price growth has almost stalled and demand is yet to recover from the impact of the General Elections, delayed allocations to major infrastructure projects, and heavy monsoon rains, especially in August.

The company stated that these results align with its strategy "to build a strong consumer-facing business." The decline in profit was attributed to higher interest and depreciation expenses, driven by investments in the Building Materials and Renewables sectors.

Grasim's capital expenditure for H1FY25 stood at Rs 1,884 crore. The budgeted standalone capex for FY25 is Rs 4,691 crore, of which about Rs 3,000 crore is towards new growth businesses, the company said in a statement.

Segment results 

Revenue from cellulosic fibres business rose 6 percent YOY to Rs 4,125.1 crore in the quarter and clocked highest ever quarterly CSF sales volume at 219 KT, up 4 percent YoY, according to the company's investor presentation. The chemicals business revenue stood at Rs 2,054 crore, up 3 percent YoY and EBITDA up by 16 percent YoY, driven by higher profitability in chlorine derivatives and specialty chemicals.

The Building Materials segment reported revenue of Rs 16,683 crore, up 3 percent YoY driven by Paints and B2B E-Commerce businesses. EBITDA stood at Rs 1,886 crore, down 28 percent YoY, mainly due to lower realisations in cement business and initial investments in Birla Opus. For the paints business, the company has spent capex of Rs 8,470 crore till September 2024, about 85 percent of the planned Capex outlay.

Cement business revenue stood at Rs 15,635 crore, down by 2 percent YoY.

During the year, UltraTech added 9.9 Mn TPA (Million Tonnes Per Annum) of grey cement capacity (till Oct’24) with a target to reach total grey cement capacity of 162.4 MnTPA in FY25.

Commenting on the newly launched paints business, Grasim said, "The production is steadily ramping at its three plants - Ludhiana, Panipat and Cheyyar commissioned in Q1 of this financial year. Trial production has started at Chamarajanagar and Mahad plants."