Grasim Industries Limited

Ladies and gentlemen, good day and welcome to Graphene Industries Limited Q3 FY24 earnings conference call. As a reminder, all participant 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 then zero on your telephone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head, Investor Relations. Thank you and over to you, sir.

Yeah, thanks, Shashi.

Hi, good morning, everyone. Wish everyone on the call a happy 2024. Thank you for joining us today to discuss Glassim's third quarter financial results of financial year 2024. The financial statements and presentations are available on the exchanges and as well as on our websites. For safe harbour, kindly refer to our costary statements highlighted in the last part of our presentation. Our leadership team is present today on this call to discuss our results. We have with us Mr. S.K. Agarwal, Managing Director and Mr. Pawan Jain, Chief Financial Officer, Rassim Industries. Also joining the call with me Let me now welcome Mr. Pawan Jain for his opening remarks, post which we will open the floor for Q&A. Over to you, sir. Good morning everyone. First and foremost wishing you all a very happy and prosperous 2024 on behalf of GRASSI. It is always a pleasure to be with you for discussing our quarterly reserves. Looking at reflections, I am happy to share that we have ended 2023 and started 2024 on a satisfactory note across multiple trends. To start with the latest one, We have successfully completed our rights issue with an oversubscription of nearly two times. This reflects the support and belief of all our stakeholders who have and would participate in Grathen's growth journey. Let me now share three developments on the ongoing growth initiatives and projects. We have completed expansion of our specialty chemical capacity, which is epoxy polymers and curing agents. doubling to 246 kTPA versus 123 kTPA areas. This would enable us to meet our valued customers' growing demand and further solidify grassroots foothold in India's growing demand for specialty chemicals. Further, project implementation of world's largest single-site capacity for CPVC resin facility has also commenced in arrangement with Lubrizol at our village site. We are also progressing in line with regards to our 50,000 tons per annum capacity of ECS, which is expected to be completed by Q4 of next financial year. Post completion, all these initiatives would improve chlorine integration to around 70% from current level of about 63%. In Viscose, we continue with our depot-making activities at Nagda, Vilayat and Kharaj. The current installed capacity stands at 842,000 tons per annum. Our Viscose business is making new strides in the area of sustainability. The business has received first rank in Canopy's 2023 hot-button report with a rating of Dark Green Short. The business has implemented EU-backed technology at Kharaj, the second plant to achieve this feat. As pioneering circular solutions in fashion industry, the business has made first shipment of its fly-cell fibre produced with recycled cotton waste for use in textile value chain and the response has been win-promising with repeat orders. Our base business has started trial production at three plants which is Ludhiana, Heliar and Panipat. Brand architecture under Birla Opus is complete and we would be launching a full range of products in FY25. Birla Pivot has grossed Rs. 120 crore of monthly revenue run rate in December 2023. The private label Birla Pivot Times is gaining good response and is now launching private label in plywood and door categories. Moving on, would like to share key global trends having varying on our different businesses directly or indirectly. Given U.S. economy has entered calendar year 2024 on a stronger footing, which reported to 3 CY23 GDP of 3.3% against the estimates of 2% Federal Reserve in its latest years left the key policy rate untouched at 5.25 to 5.50%. The US Composite Purchasing Managers' Output Index has increased to 52.3 this month, the highest level since last June. In contrast, Eurozone and China are facing headwinds in their economies. Eurozone's manufacturing PMI showed that output contracted at a slower pace in January 2024, as the index grace rose to 46.6 from 44.4 in December 2023. Two major economies of Eurozone, Germany and France, reported slowdown in pace of growth in the manufacturing activity. China's official manufacturing PMI increased up a tad to 49.2 in January 2024, compared to 49 in December 2023. In efforts to support real estate sector that underpins consumption and household wealth, People's Bank of China announced 50 BPS cut against in past two years, effective from 5 February 2024. This is expected to inject about 1 trillion yuan in the banking system. Given such developments, IMS has also revised its global growth forecast 4,2024 to 3.1% from earlier forecast of 2.9% with improved outlook for US, China and India. However, the current rates see disruptions, which manage about 12-15% of world trade, including 30% of container traffic, appears to be adversely impacting the outlook on global trade. Adding to this uncertainty is super election year 24, which would see more than a third of the world population across 60 plus countries undergoing national elections. All these uncertainties pose challenges as also possibly new opportunities in 2024. Switching the context to Indian context, the first advanced estimates published by NSO in January 2024 shows real GDP to grow by 7.3% in FY24, better than revised growth estimate of multiple agencies like RBI around 7%, IMF forecast of 6 or 7%. Available high-sequence indicators like IIP, vehicle sales, growth in bank credit, real estate sales, GST collections, etc. appear to support NSO's growth estimates. VX-Graphim expects to resemble India growth story given our presence across sectors. Coming to our financial performance for the quarter under discussion, the consolidated revenue struck at highest levels of Rs. 31,965 crore, recording growth of 12% YOY. The TTM revenue, Trading Transmissions revenue, which is indicative of FY24 revenue, crossed milestone of Rs. 1.25 trillion. growing at CAGR of 14% over FY20. Consolidated EBITDA grew by 34% YOY to Rs. 5,150 crore. The TTM EBITDA is nearing milestone of Rs. 20,000 crore, hosting CAGR of over 9% since FY20. Conglomerate structure with diversified businesses has enabled consistent growth in revenue and profitability. Cement and financial services businesses under Ultratech and Azustralia Capital are on an accelerated growth journey, fulfilling the infrastructure and financial needs of our country. Our stand-alone performance continues to exhibit stability despite various global commodity cycles. Both our key businesses at stand-alone level, with scores and costs currently in down cycle, continue to remain profitable. Our established risk management mechanisms and post-leadership enable us to ride global price volatility optimally and deliver industry-superior performance. Stand-alone revenue for the quarter stood at Rs. 6,400 crore, recording a growth of 3% YOY. The revenue growth was largely driven by volume growth of 34% in ESF and 5% in cost-deferred business. However, the profitability was impacted with global weakness in chemical segment led by oversupplied market and sharp decline in realizations. For simplification, we have made some changes in our results presentation with regard to segmental disclosure. We have combined our textiles, insulators, paints, B2B, e-commerce, adjusted for inter-segment elimination and unallocated income under one head name, other businesses. Such categorization aligns the disclosure with our published results. Viscose business growth took strong on YOY basis, partially on the bank of markets, reverting to normalized levels post exceptionally weak Q3 FY23. Part of VFI volume, which finds its applications in Embroidery and Georgia and home furnishings, has lower demand pull during the quarter. The realizations were further impacted by cheaper imports from China. The sharp YOY decline in caustic prices appeared to bottom out at current levels of about $400 to $450 level. However, the market remains over-supplied due to large-capacity additions in FY23. Our change business, Viva Opus, is on trade for launch in the current quarter, with trial production already on F3 plants. namely Panipat, Ludhiana, and Jaya. We have already completed ground architecture under our 10th Grand Villa Opus. The sub-ground portfolio across multiple categories of luxury, premium, and economy segments and development work for design, package artwork, consumer communication, etc. is complete. The supply chain, logistics, and distribution network is also in place to support the launch-based strategy. we would offer complete range of high-performance superior products in the premium, mid-range and mass markets favorably placed across multiple price points. The dealer onboarding has already commenced and you would certainly hear out more from us over the calendar year 24. As highlighted in the last quarter, B2B e-commerce business under brand name of Bella Fever has already crossed monthly revenue run rate of Rs. 100 crore. The quarterly revenue run rate is now reaching Rs. 300 crore. Private labels under Zillow Private Times is getting good response. We have already initiated in-store branding initiatives also. And now widening our coverage for private labels, adding plywood and doors. The geographical front of Zillow Pivot has now extended to cover about 20 states. CapEx 4 partners to get Rs. 1,425 crore with 76% allocation to change business. We remain on track to achieve planned CapEx guidance of about Rs. 5,900 crore in SI24. We can take the questions.