Grasim Industries Limited

Ladies and gentlemen, good morning and welcome to the Q4 FY25 conference call of Grazie Mitashvi. As a reminder, all partisan 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 touch-tone phone. I now hand the conference over to Mr. Angit. Panch Matya, Head of Investor Relations. Please go ahead. Yeah, thank you, Rai. A very good morning to everyone. And on behalf of the Asim Industries, I would like to welcome all of you to our fourth quarter financial year 2025 results and business performance discussion. Hope you have got a chance to refer to our previous presentation and press release uploaded on our website and exchanges. Before we begin, I would just want to draw your attention to the disclaimer statement which is covered in the last slide of our presentation. Let me now introduce you to our management team present here with us on the call. We have with us Mr. Raman Kishapanya, Managing Director, Classroom Industries and Business Head, Birla Upad, RTI Business. And Mr. Pawan Jain, Chief Financial Officer, Classroom Industries. We also have with us Mr. Daryl Goodley, Business Head, Good morning, how are you doing? to all the participants who have joined this call from different geographies. I welcome you to Graphene Industries Quarter 4 FY25 Investor Call. It's an honour to be chosen as the Managing Director of Graphene Industries. Originally a textile company, Graphene Industries has captured an extraordinary path of growth, innovation and diversification over the last 28 years to become India's conglomerates with strong presence in textiles, chemicals, building materials and other industries. I joined the Arisabilla group in the telecom business in 1997. At that stage, the group was 2 billion US dollars in revenue and dollar convergence was Rs.36 with presence in textiles, aluminium and stock of cement, telecom, fashion, financial services and other businesses. In the last 28 years, under the leadership of Mr. Kumar Mangalam Dilla, the group revenue has risen to 66 billion US dollars and the dollar conversion is 85, thereby growing by 30 times at constant currency. This superlative growth has been driven by a. Believing in India and global growth story b. Combination of building scale in existing business and successfully diversifying to newer sectors. Similarly, the story of grassroots transformation, which has delivered consistent 15% year-to-year over a long period of 15 years, is akin to India's growth story. The company has incorporated multiple startups and seen through its journey until the unit becomes a force in itself. India is witnessing an unprecedented economic boom. has captivated the world's imagination. Very few countries in the world today have a multi-decadal runway of high growth or Amritkal as our prime minister calls it. Our economy is truly and well poised to hit the 10 trillion dollar mark in the next decade or so. The scale of our mission is now being matched by the scope of the infrastructure evolution set to unfold. I would argue We are not in just infrastructure development phase, but in Asian building. And the grassroots diversified businesses are all set to play a pivotal role as the heart of this monumental nation building endeavor. Our treatment from Alta Tech fortifies the expanding highways. Our pheromonic branch like IWA and ISIL power from inside the fractions for the new continent India. Our chemical business supports varied applications across metal, construction, textile, pharmaceutical and energy. Our renewables are making India more sustainable and our financial services from Al-Fadila capital give wings to aspirational consumers. In the last 18 months With the launch of B2B e-commerce business, Billa Pivots, and the recent launch of our paint business, Billa Offers, Graphing embodies the spirit of an aspirational India. This India, teeming with dynamism, audacity, and penchant for destruction, finds reflection in both our paint and B2B business. In fact, these ventures mirror India's risk for innovation and its refusal to settle for status quo. In 2020, at the peak of COVID, when our group chairman asked me to lead Grassland 4A into change, I wondered, why change? With a beam in both our eyes, we found the answer lay in the backdrop of India's booming infrastructure, the construction sector. This sector alone is poised to command 9% of GDP, translating to 900 billion US dollars in around 10 years. Drafting deep insights into building material ecosystems found over the years through brands like Alta Tech and Jilla White offered us a unique vantage point. Our journey into paint industry, therefore I discovered, was a strategic extension connecting the dots from the foundation to the facade across Indian homes. I also discovered that this 5-century-old decorative paint industry, India's first extra consumption, stands at a near 3.5 kg. This contrasts Sharpe with global average of 10 kg per capita and drops against 25 kg per capita of West nations. For a country at a forefront of economic acceleration, India ranks at bottom 10% of the paying commercial. This reminds me of my telecom stint when India liberalized telecom services in 1990 But till the mid of 2010 and even after 25 years, India was amongst the bottom 10 percent of broadband services adoption. However, when large-scale industries came in to build school capacities ahead of demand and industries focused on affordability, quality, technology and coverage, India rose to a numero uno, the highest broadband usage in the world and the second largest in terms of number of mobile subscribers in the globe, helping India in its inclusive or pervasive digital journey. Therefore, in the context of change, this represents a galactic opportunity. With rising per capita income, a young population, a booming real estate As a short-term repainting cycle, the potential for growth in paint consumption is immense. With all these factors, Grassland's board in 2021 made a long-term commitment to decorative paint business with a vision to redefine the industry with consumer-centric programs and practices. They empowered us with Rs. 10,000 crore investment to prepare for tomorrow with a single-mile diversity. purpose to revolutionize the decorative range business and pass on the fruits of competition to the consumers. The paint sector is at the top of a similar transformative impact which will turn India's Prakash into a beautiful place loved by one and all. When I look back at the last four years work especially the last six months, I can say with pride on behalf of Birla Office team that no paint company globally has ever lost in one shot factories, operations, products and services at the scale that Birla Office has undertaken. So it's a matter of pride to share that in less than six months of Pan India operations, as per internal estimates, Birla Office by itself has become India's number three decorative paint brand. Well done team Villa Opus, aptly led by CEO Rakesh Harwari, a strong, committed and agile force of over 4700 employees and lakhs of partners in the paint ecosystem. The driving factors for this early success include number one, fastest capacity ramp up in the world with five out of six plants commercialized till March 2025. adding 1096 million litres per annum in short MLPA capacity in FY25, representing 21% share of the organised decorative paint capacity. All these plants are fully backward integrated with our own emulsion and resin polymer, key to delivering innovative product consistent quality and cost competitiveness. The company's main plant needs stringent sustainability norms and a climate finance compliance as per ISEE funding norms. Our final plant at Kharagpur is scheduled to be commercially launched in H1 at Y26, taking our overall capacity to 1,332 MNPA. Core Kharagpur plant launch will offer capacity shares of 24% in this sector will provide us the pathway to travel from existing high single-digit revenue market share to penultimate levels of capacity share. Further, at the existing plants, Birla offers its ability to add 400 to 500 MLPA incremental capacity with minimum cost whenever the need for the same arises. The industry is also undergoing a structural shift with consolidation of players through merger and acquisition and same is expected to reshape the competitive landscape. Number two, fastest availability of near complete portfolio of 176 products and 1250 plus FTOs. Villa offers is now competing across all six business categories in decorative frames including interior and exterior water based frames including distemper, enamel frames, wood finishes, water proofing solutions, and what effort and design are finished in the economy, premium and luxury price segments and institutional business. We are delighted with the response received on our quality of product from retail and institutional customers and ecosystem partners including architects, designers, contractors, trainers and dealers. Our luxury and premium products are now contributing more than 65% to the company's revenue, a to Birla offers quality of products. Our unique polymer synthesis process and hybrid composite polymer design has helped to create paints without staining, dirt resistance, crack visibility, film integrity, excellent durability, high scrub, highest whiteness, and such steps additions to name a few. 3. Wide and deep distribution reaching every corner of the country across 6,600 towns in India. A network of 137 depots delivers across 33 states and union territories, supporting just-in-time delivery for the dealer network. Also, Villa offers this upgrading to the consumer experience and its transforming security paint retaining by building most of its kind company experience stores known as Birla Office Paint Studio in the metros and franchise lip-sized stores across 300 plus towns known as Birla Office Paint Gallery. Our compact painting machine has healthy adoption across all users. Fourth, all-round positive feedback from all key users of our quality and acknowledgement of our exceptional paint performance features such as paint-resistant, impassable, spotless finishes, scatter-resistant, superior dust-resistant, extra washability, and enhanced coverage and capacity. Laps of painters and contractors encouraged with product quality, innovation features, and better economics have joined our exclusive painter and contractor app and are recommending Villa Office products. There is a quantum jump on the number of architects and interior designers' recommendations for Villa Office products after the carry of vigorous steps on matrices such as tactile feel, adhesions, aesthetics, finish and longevity. Equally strong response from institutional clients with a number of sites executed has crossed five-digit mark just in six months across cooperative houses, large and mid-sized builders, factories and industrial units, government projects, including tourist attractions and religious places. Finally, the new age villa office brand is seen as a challenger and fast establishing itself as an embodiment of India's rich heritage but modern, vibrant and technological innovation. Birla office incorporates thrust from the house of Birla, 20 essentially Indian with a beauty personified from over. A meaningful and memorable advertising campaign, heavily supported with a 360 degree media strategy has helped in an exponential jump of all brand-serious messages, specially unedited recalls top of mind awareness, etc. In summary, Grassin's paint venture represents the indomitable spirit of a startup, which can be epitomized through five Cs. Creativity, Courage, Contemporary, Choice, and Collaborative. With these guiding philosophies, Birla offers team genes to revolutionize every facet of the decorative paint industry and pass on the benefits to all stakeholders. Moving on, as you well aware, Altajet sells white cement based kurti under the Villa White brand. All decorative paints players include kurti sales in their overall decorative paints revenue and volume reporting. Villa Opus does not sell white cement based kurti. Therefore, on a night to light basis, graphene-organized decorative paints present exist quarter-four FY25 has crossed 10% revenue market share mark as per our internal estimates when revenues of Billa Offers and Billa White Kutty are combined. We will continue to track this metric. Separately, Billa White is aggressively expanding its Kutty manufacturing capacity with a recent announcement of acquisition by Ultratech of Wanda Worldcare Pvt. Ltd. With this acquisition, villa-wide foot tea and gas capacity at the Cope Lounge in FY26 will rise to 23 lakh metric tons, besides 16 lakh for wide-shrink manufacturing. Moving on to our digital venture, B2B e-commerce. In line with government's vision of creating digital India and empowering SME businesses, Birla Pivot has created a new age, high growth B2B e-commerce platform that helps them with procurement of raw materials across various sectors and catalyzes their growth by streamlining financing and supply chain gaps. Birla Pivot has made significant progress in FY25 across all fronts. such as technology, revenue scale-up, category diversification, digitization, and working capital management. Billa Pivot has crossed annual run rate of Rs. 5,000 crores based on Exit Waterport at Y25 in less than 2 years of inception and achieved a 3.3 times revenue growth over FY24. heartiest congratulations to Birla Pivot team, heavily led by CEO Mr. Sandeep Kumdavu. The Birla Pivot platform now holds a catalogue of more than 40,000 SUs across 300 plus brands and OEMs in 35 product categories with private-level portfolio of darkware, tiles and plywoods. Birla Pivot customer base spans top tier EPC companies, civil contractors, real estate developers, OEMs, fabricators, dealers, and retailers, etc. With successful deliveries of over 375 pieces across 26 states and union territories, Billa Pivot has established a robust network of suppliers and logistics providers who facilitate a very seamless fulfillment experience. Moving on, we have separately shared existing business performance including cellulose with fiber and yarn, chemicals, caustic and pressure lethany, textiles, insulators and others in the Q4 FY25 investor deck. Existing investors and analysts have already been tracking performance of these evolved businesses for a long time and are familiar with its journey and way forward. In summation, we are pleased to report that Grafton Standard of Revenue has risen to its highest level at Rs. 8,929 crore in Q4 FY25 an impressive Y&Y growth of 32%. This reflects the initial success of new businesses and sustained strength of our existing businesses. Further to that, on the ESP front, we are happy to share that Graphene was listed for the second time in a row in the HMP Global Sustainability Yearbook 2024. Graphene also won the Master of Risk Conglomerate Award in the last cap category at the India Risk Management Awards, 2025. In conclusion, as new to this role, IT rafting at the cusp of transformation with increasing share from consumer-oriented businesses. This is driven by the cost-moderate opportunity in the Indian economy and the values and purpose of the adjustable growth. Arasim now uniquely combines dynamism, frugality and energy of a new age startup businesses like Pinch and B2B, e-commerce along with muscle, reliability and brand strength of well established businesses in the textile, chemicals and energy spaces. We will not just grow but also nurture the ecosystem enriched lives and contributes to the foundational elements of New India. I take this opportunity I would also like to thank Mr. Pawan Jain for his superannuating on 15th August 2025 for his stellar role played in shaping Grafton's transformative journey. I would also like to welcome Mr. Hemant Yadav, a Grafton veteran and a colleague of Pawan who will take over from him as Grafton CFO from 16th August 2025. I will now hand over to Pawan to give details on his performance.

Thank you immensely for giving a detailed business review on the new businesses in the year gone by. I would like to end with our established core businesses, namely cement, cellulosic fibers and chemicals, continue to deliver strong performance. With market leadership across businesses, delivering quality products to meet customer requirements and healthy cash flows, the core businesses provide both stability and strategic leverage. Some estimates in the year gone by in respect to our core businesses are, number one, Alunosic Fiber has achieved highest ever annual revenue of Rs. 15,987 crore, growth of 6% YOY, primarily led by volume growth of 4%. However, the profitability of this business during the year was lower by 12% on YOY basis due to higher key low material prices, absorbed by the company partially. In Q4 and entering Q1, slight moderation in China's capacity utilization and higher inventory days have resulted in correction in global prices of cellulose fibers and at the same time, pulp prices have also started to drop. As approved by the board, the work on the first phase of lyophil fiber projects of 55,000 tons per annum out of a total plant capacity of 110,000 tons at Haria Karnataka, the work has commenced. The new plant is expected to be commissioned by mid-2027. In chemical business, while available capacities increased by 300 TPD expansion at Velayat plant in Q3 FY25, caustic cell volumes were lowered by 3% YYY due to planned shutdowns at Karwar and Gigi Puram for two days during the quarter. Moreover, higher negative chlorine relations due to continued oversupply and lower demand from end-user industries have moderated EQ growth. However, chlorine derivatives business performance is improving significantly with focused business development activities across products of portfolio. We enter FY26 with full available capacity of caustic and specialty chemicals. The projects of ETH and CPC plants at Zillai are expected to be commissioned around Q2 FY26. One highlight over the past three years, both Cellulosic, Cyber and Chemicals business combinedly have consistently delivered top line of over Rs. 30,000 crores with EBITDA of over Rs. 2,500 crores across cycles, reflecting the strength of these businesses. Cement business under Intratech has been growing with total capacity of up to at least Rs. 215 million with estimated EBITDA per ton saving of about Rs. 250 to Rs. 300 by 2027. In financial services business, with AUM now over 5 lakh crores, growth of 17% YOY and total lending portfolio of over 150,000 crores, growth of 27% YOY, Abhishek Mahesh Patel is one of the fastest growing ADFC in India with consistently growing revenue and profits. Happy to announce that the Board has approved a final dividend of Rs. 10 per share, reinforcing our legacy of consistent shareholder relocation. This marks the 62nd consecutive year of uninterrupted dividend payments. A testament to our financial strength, resilience and commitment to reward the shareholders through all business cycles. With this remark, I will now open the floor for questions.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. One moment, please, while we poll for questions. The first question comes from the line of Amit Purohit from Illara Capital. Please go ahead.