Grasim Industries Limited

Ladies and gentlemen, good day and welcome to Q2FY24 earnings conference call of VASIM Industries Limited. As a reminder, all parts and lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star 10-0 on a touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit, Head Investor Relations from Graphium Industries Limited. Thank you and over to you sir. Yes, thank you. Wish everyone on the call a very happy and prosperous summer 2018. Thank you for joining us today to discuss Graphium Financial Results for second quarter of financial year 24. The financial statements and presentations are available on our website as well as on the website of stock exchanges. For safe harbor, kindly refer to the statement highlighted in the last slide of our presentation. Our leadership team is present today on this call to discuss our results. We have with us Mr. S.K. Azarwal, Managing Director and Mr. Baban Jain, Chief Financial Officer, Grassim Industries. Also joining the call, we have our business leadership team. We have Mr. Jayal Dugle from Chemicals, Fashion, Yarn and Installator business and Mr. Hemant Kampania and Mr. Lakshi Khargave from Trace business. I would now welcome Mr. Bhavan Jain for his opening comments, post which we will open the floor for Q&A. Over to you, sir. Yeah, good morning. Hope you all had a joyful and sparkling Jivadi celebrations. We from Grassing Management wish everyone on the call a very happy and prosperous new summer. It is a pleasure to be with you all for discussing our quarter 2 reserves on this call. First, I would give some highlights on macro and business environment and then would cover our financial performance for the quarter under discussion. Global economic activity and trade are witnessing slowdown although unevenly across geographies and sectors. While in the US, economy is showing sign of resilience with tightness in labour market, better than expected Q3 GDP and stable domestic consumption, there exists tough economic scenario in Europe zone. It appears that China is again witnessing signs of slowdown The latest reading of GDP showed that US economic activity rose by 4.9% while it is contracted by 0.1% in Germany and Eurozone and is estimated to have contracted in Japan and UK as well. Tightening financial conditions in response to monetary actions to address still elevated inflation, persisting geopolitical tensions, and growing geoeconomic fragmentation rendered the global outlook as fragile. In October-November 23, U.S. Fed, ECB, BOE, BOJ, and Bank of Canada held the weight and did not announce any change. Fed's policy statement remained hawkish as it reiterated that future rate hikes cannot be ruled out if inflation continues to remain elevated. China's expected reopening boom based on the export growth and consumption revival doesn't seem to have materialized on expected lines. As the macro global environment continues to remain volatile, weakness is seen in relations of global commodity segments in which we operate like viscose and chloral. On the domestic front, RBI's policy kept status quo on both strengths as well as on rates. Growth and inflation estimates were also retained at the same level of 6.5% and 5.4% respectively for FY24. India witnessed below normal rainfall in 2023 after a span of over 4 years of normal and during this monsoon, though in the rain-fed agricultural region, also called as monsoon core zone, the rainfall received was normal at 101% of LPA. During the quarter, most economic indicators showed signs of improvement. CPI inflation increased down. IIP saw an uptick in August 23 and September 23 after falling for two consecutive months. Sector-wise, both cement production and steel consumption recorded growth, while garments and chemicals witnessed negative growth, which could be largely attributed to lower growth in exports as these sectors have significant export-led demand. The ongoing festival season, which also coincides with the harvest time in rural areas, will be crucial. In the larger textile value chain, The pent-up demand seen in 2022 post-lifting of lockdowns is witnessing normalizing trends in 2023. Additionally, the inventory trends are also normalizing, though focus of majority of the brands remain on reducing inventories and moderating buys. Coming to our financial performance for the quarter, the consolidated revenue grew by 10% YOY, to Rs. 30,221 crore Consolidated EBITDA grew by 14% YOY to Rs. 4,509 crore The growth was driven by Cement and Financial Services businesses as both Ultratech, Cement and Ajit Kapilak Capital posted robust results At standalone level, Revenue D grew by 4% to Rs. 6,442 crore and EBITDA rate grew by 21% YOY to Rs. 1,354 crore. The sales volumes in standalone businesses, the cost and cost of soda recorded growth of 24% and 3% respectively on YOY basis. The impact from global decline of prices as well as the mismatch in demand supplies which resulted higher direct impact on realizations for discos and chloralkali businesses. In specialty chemicals, our epoxy business has recorded volume growth of 25% YOY and the expanded capacity of epoxy is under commissioning and expected to be operational in 2023. We have announced our brand for paints business, which is Birla Opus as mother brand. Sub-branding and go-to-market strategy are progressing as per internal estimates. Also, as stated earlier on commercial launch, happy to share that the company has received consent to operate four, three of the plants, namely Panipas, Lugiana and Selyar. Villa Pivot, which is B2B e-commerce business, was launched last quarter and it has crossed milestone of 100 crore in the first quarter gone by revenue of Rs. 100 crore and now inching towards monthly run rate of Rs. 100 crore. As highlighted earlier, on private level, we have launched build-up image tiles, ceramic tiles and also exploring other categories like doors and plywood. The company is witnessing high healthy repeat rate from the direct buyers in first-hand fragments. In its transformational growth journey, Graphene is implementing its highest ever capital expenditure plan. As you all would be aware, the board has approved fund raise of Rs. 4,000 crore by way of rights issue in the board meeting held on 16th October 2013. Proceeds from the rights issue would be used for ongoing CAPEX and retiring dates as well as for general corporate purposes. At this point, we would not be able to share more details about right issue and request you to avoid questions specific on this. We would share additional details with all in the due course of time. We now open floor for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Naveen Sardew from ICICI Securities.

Please go ahead. Mr. Naveen, your line has been unmuted. Please go ahead with your question.

Mr. Naveen, we are unable to hear you. I request you to unmute your line from your side, please.