Grasim Industries Limited

Ladies and gentlemen, good day and welcome to the Q4 FY26 earnings conference call of Graphene Industries. 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 we need assistance during the conference call, please signal an operator by pressing start and zero on your touchtone phone. I now hand the conference call to Mr. Ankit Panchmatia, Head Investor Relations of Graphene Industries. Thank you and over to you, Mr. Ankit.

Thanks. Good evening and thank you for joining Grasim fourth quarter and financial year end 2026 earnings call. The financial statements, press release and presentation are already uploaded on the websites of stock exchanges and our website for your reference. For safe harbor, kindly refer to costly statement highlighted in the last slide of our presentation. Our management team is present on this call to discuss our results and business performance. We have with us Mr. Himanshu Kampanya, Managing Director, Grassim Industries and Business Head, Birla Opas Paints. Mr. Hemant Kadil, Chief Financial Officer, Grassim Industries. We also have with us Mr. Jayan Dugle, Business Head of Chemicals, Cellulosic Fashion Yarn and Insulators Business. Mr. Wadiraj Kulkarni, Business Head of Cellulosic Fiber Business. Mr. Sachin Rahai, CEO, Birla Opas. and Mr. Sandeep Gumravilli, CEO, Birla Pivot. Let me now hand over the call to Mr. Hemanshu for his opening remarks. Over to you, sir.

Good evening, everyone, and thank you for joining Grasping Quarter 4 earnings call. Happy to share that FY26 has been another landmark year in Grasping's journey of transformation a journey that has steadily evolved the company from being a leader in select manufacturing businesses into a diversified platform of high-growth, future-oriented enterprises. Over the last several years, we have consciously built capabilities across manufacturing, consumer-facing businesses, digital platforms, financial services, and next-generation building materials ecosystem. The outcome of these investments are in our results. Consolidated revenue stood highest at Rs. 1,75,431 crores or exceeding $18 billion in U.S. dollar terms, registering compounded annual growth rate CAGR of 18% over period FY21 to FY26. It's truly remarkable to note that Grassin's standard of revenue have also reached an all-time high of Rs 41,039 crores, showcasing an impressive compounded annual growth rate of 27% during the same period. What we are witnessing today is the emergence of a structurally stronger grapheme with multiple engines of growth, sharper strategic clarity and enhanced resilience across cycles. The key pillar of our transformation has been our unwavering commitment towards building leadership positions across every business in which we operate. Historically, Grasim has built category-leading business through sane operational excellence and disciplined execution. Today, their philosophy continues to guide our expansion into new age opportunities like Pains and B2B e-commerce business as well. Starting with Pains first, I want to Take you back to a moment not too long ago, when we announced entering the decorative paints business in year 2021, the market had questions. Plenty of them. Could a newcomer truly challenge an industry terminated by deeply entrenched incumbents with decades of brand loyalty, distribution network, and pricing power? Was this ambition too tall? Today, I'm here to give you the answer. In Q4 FY26, Villa offers delivered revenue growth of 52% year-on-year on a like-to-like basis. Further, excluding CWIP, on a like-to-like basis, the growth trajectory rises to 71%. In an industry where single-digit growth is celebrated, we have doubled our top line in one year. There is a growth of 100% revenue in FY26, versus FY25. The FY26 performance is heartening despite the business was still not under its full-scale operations as current food plant was commissioned in October 2025. But revenue alone does not tell the full story. What truly matters is market share because market share in Pange is trust made visible. As per internal estimates, The decorative paints industry revenue stood approximately at Rs. 15,500 crores in Q4 of FY26, including listed and unlisted paint majors, putti, wood finish and waterproofing companies and others. However, this includes the industrial paints and other non-decorative revenues. Our revenue market share expanded by approximately 90 basis points quarter on quarter strengthening our position as the number 3 player in the organized decorative range sector. The FY26 revenue market share expanded by 370 basis points over FY25. When you combine villa offers with our villa wide putty business only, we are now nearing the number 2 position in Indian decorative range. That is not a distant aspiration anymore. It is within striking distance. Let me take you through key enablers of Payne's performance. Firstly, on the distribution front, Villa Opus expanded its presence across 11,500 towns, crossing 50,000 dealers' build marks. With 146 depots, Villa Opus ensured serviceability at industry benchmarks The institution sales channel has built a sizable foundation and grew 43% quarter-on-quarter and 212% year-on-year with over 10,000 sites built in quarter-four FY26 alone. Below-office products now have 70-plus specification approvals from multiple governments and other departments across cities with a similar number under various stages of approval. The solution sales channel is working on a robust pipeline of 45,000 sites in various stages of work across 650 plus towns. Secondly, the team continues its focus to drive secondary sales from dealer counters to contractors and consumers. The strong quarterly revenues have been possible on back of strong secondary by over 4.5 lakhs active contractors who applied superior villa office products. The 10% free paint promotion continued on 10 and 20 litre packs across all emulsion top coats and waterproofing range, excluding sub-economy top coats and undercoat primers. The strong relationship with paint contractors, the key influencers, continued to scale strongly on back of digital first foundation platform through a contractor app Opus IDs helping the team to engage on a scale level. In conjugations with the centrally controlled tinting machine analytics show strong colorant and shade consumption across geographies pan India. With nearly 37,000 active tinting machines in operation, the tinting data continues to guide decision making and understanding of consumer consumption trends. Villa offers continues to uplift the contractors' and painters' workforce with industry-based schemes and loyalty benefits which remain unmatched even today, besides working on programs to build painter skill sets and non-monetary benefits including well-being and education support for his family. The repeat purchase by contractors is given on back of superior quality which helps their reputation in the market and with the customers. Villa Opus continues to grow steadily also amongst the architect and interior designer. In short, AID influenced the segment where that partner network has now crossed 3,000 active firms across 60 cities, estimated to reach the second largest AID network in the industry. Thirdly, on the product front, Villa Opus added 42 new products in FY26, majorly in A in-house wallpaper, B, launch of painting tools under sub-brand Artish, C, waterproofing products under sub-category All-Dry and many more in the immersion and enamel range. With this, the product portfolio expanded to 218 products and 1,850 plus SKUs serving a wide spectrum of customer preferences and market segments. Willow offers soft, robust demand for its emulsion and waterproofing products, where revenue market share has crossed double-digit mark. The premium and luxury products contribution steady at 65% by value across all categories. Billa Offers continues to benchmark its product offering with a competition in real-field environment and even now, 75% of Billa Offers product rank number one In product security versus like-to-like competition, base is blind product test by specialist applicators across emulsions, waterproofing, enamels, wood finish, distemper, etc. Fourthly, on the brand front, one out of every two consumers spontaneously recall Villa Opus brand. This is no mean feat. Villa Opus brand continues to be built on its already number two position in unaided top of mind recall and increasing its cap with earliest number 2 and number 3 legacy players. The brand has a strong 90% plus awareness which is built on back of continuous innovative campaigns. The recent high decibel campaign in ITL 2026 featuring 10 cricket celebrities to campaign a new era of claims from individual endorsement to a collective validation, voice echoing Mabee Opus, supporting companies' product security, has garnered major traction. Look out for our latest Mabee Opus campaign with existing and new celebrities endorsing uniqueness of Villa Opus products. On its mission of enhancing customer experience in organized retailing in off-range Villa Opus exclusive branded franchise retail outlets, hit a major milestone, crossing 1,200-plus stores across 700-plus towns. As per our estimates, this is the largest organized retailing network in India, now elevating Pains Per Case experience not just in metros, but in mid- and small towns, including rural areas. Our premiumization efforts continue with expansion of our full-stack GST-compliant and attractive GST, transparent, affordable professional painting services, Paintcraft, now available in over 6,000 pin codes through paint galleries across 400 towns. To our understanding, this is amongst the only professional painting services offering attractive financial options with 6- and 12-month PMIs at nearly no additional cost, an important tool in this inflationary environment. In conjugation with our industry-first service warranty through Opus Assurance campaign, Villa Opus Plaincraft continues to build brand trust and brings in lakhs of leads and thousands of project registrations and contractor enrolments where Villa Opus products and services were eventually delivered with Opus Assurance. The fifth strong pillar is the installed capacity of 1,332 million litres per annum which is 24% of the industry capacity and the brand remains focused to drive its revenue market share in line with the capacity share in the mid-term. The utilization is steadily increasing across plants and with the rising output scale-up of our sixth plant, Kharagpur, which was commercialized in Q3 FY26, the average distance traveled by a product has come down by over 30% helping in optimizing of logistic cost while improving serviceability to the market. Now let me share updates on price hikes and raw material situation. As you will recall in the last investor call, Willow offers proactively shared announcement to raise dealer prices by 2-6% in January and February 2026 across range of products. This increase was to test the channel and consumer reaction by bridging the gap with industry fears in this first phase of pricing. I am happy to share that the initial response to the price gap reduction is encouraging with primary and secondary sales continue to be strong during this fourth quarter. We are therefore delighted to share that in March 2026, Villa Opus on its own crossed the coveted 10% revenue market share mark based on nationwide retail study commissioned by us. I'll give you a moment to observe this. In April 2026, Bill of Us announced its second and third phase of price increase to offset the raised input cost. These multiple price increases have been staggered for implementation within quarter one of FY27. A large percentage of decorative paints, raw materials and entire packaging material is linked to crude derivatives. The volatile geopolitical environment and steep depreciation of our currency against dollars have resulted in spiraling of cost of goods to as high as 20-25% of COGS and we are still counting the impact. This level of increase is unprecedented And even now, the raw material prices are unstable and unpredictable. Through these increases, Willow offers have tried to cover the input cost escalation. However, if such global, unless persist, raw material prices could further escalate and may remain elevated for a foreseeable future. We understand the industry has never seen such high inflation that has forced the entire industry to take multiple price hikes back to back. This VUCA situation makes demand forecasting difficult and we need to closely monitor the situation as impact of price rise will slowly be felt by consumers and contractors in second half of quarter 1 and entire quarter 2 by 27. April 2026 primary sales performance remained in line with March and Villa offers continues to monitor the secondary sales trend closely on a weekly basis along with price elasticity of demand. With the inflation impact on input costs expected to continue until much after the war comes to an end, its impact on medium-term consumer demand remains uncertain as demand elasticity curve will be fully tested in this period. Despite these cost pressures, the company will continue to offer 10% free paint consumer proposition. In spite of forced price increase, what I can confidently say that Villa offers remains committed to driving market share gains and focus on our ambition to become number two player at the earliest, while we steer business towards guided Rs. 10,000 crore profitable revenue in the third year of full-scale operations. Shifting focus to second new business, Villa Pivot, which represents Grassim's commitment towards digitally enabled B2B e-commerce ecosystem. I want to take you to a world that most people never see, but one that powers everything around us. Every building you walk into, every road you drive on, every factory that produces the goods on your shelf, behind all of this sprawling, fragmented and deeply insufficient supply chain for raw materials. Steel, cement, chemicals, polymers, bitumen and other building materials. These are the building blocks of India's growth story and for decades securing them has looked the same. Phone calls, handshake, opaque pricing, delayed deliveries and limited access to credit. It's a market measured in hundreds of billions of dollars and yet until very recently it operated almost entirely offline. That is the opportunity we saw. That is why we build our pivot. One of the primary challenges is the highly fragmented supplier ecosystem, which makes it difficult for buyers to identify and engage with reliable vendors. Additionally, the absence of transparent pricing often leads to mistrust and suboptimal purchasing decisions. Many businesses, especially MSMEs, also grapple with working capital constraints, which hammer their ability to procure goods efficiently and on a scale. Further complicating the procurement process is the inconsistency of supply as well as inefficiencies in logistics that can result in delays and increased costs. Product discovery remains limited, restricting access to a wider range of goods and innovative solutions. Finally, there is significant gaps in technology adoption among MSMEs, limiting their ability to streamline procurement operations and benefit from digital advancement. By focusing on these critical pain points, Birla Pivot aims to create a more integrated, transparent and efficient B2B procurement ecosystem. Coming to financial performance of Birla Pivot, the pace of scale-up has been extremely encouraging ahead of our revenue guidance. Let me start with a number that I think captures the momentum better than anything else. Our revenue for Q4-26 more than doubled on YYY basis. This business is in a striking distance away from our annual revenue guidance of Rs. 8,500 crores. Now in a business that is barely a few years old, doubling revenue is not just growth, it is validation. It tells us that the market was waiting for someone to solve this problem at scale and we are doing exactly that. What is driving this? It's not one thing. It is all cylinders firing together. New buyers are joining the platform at an accelerating pace. Existing buyers are combining back with larger, more frequent orders. We are adding new product categories, expanding new geographies. Every lever we track active buyers, average transaction value, transaction volumes are steadily moving up. This was also a seasonally strong quarter and we captured the demand beautifully. Now let me paint the picture of how wide our B2B commerce reach has become. Villa Pivot is now delivering to over 5000 PIN codes across more than 400 cities and we have crossed 5000 retail touchpoints. Think about that for a moment. From metro construction sites to tier 3 towns where contractors is building a school or a small factory. We are reaching them. We give them access to the same quality products, the same transparent pricing, the same reliable logistics that were previously reserved for the largest players in the main market. This is not just commerce, that is democratization. And our product portfolio keeps expanding. We are now scaling categories like steel, bitumen, copper and aluminum ingots and polymers partnering with leading Indian and international brands to offer a breadth of SKUs that no single distributor could ever match. We are becoming the one-stop destination for building materials procurement in India. But here is what truly sets Villa Pivot apart. This is not marketplace with catalog and checkout button. We have built an integrated operating system for purpose built modules working in concert. Also, what gives us a unique edge is that we are not a startup parachuting into this space. We are a grassroots industry, part of the Cabila Group, with deep relationships across the building materials value chain, from cement to chemicals to metals. Our supply-side credibility, brand touch, and on-ground presence are modes that no pure-play digital platform can replicate overnight. We are still in the early innings. Revenue has more than doubled. But the runway ahead is enormous. Our focus going forward is clear. Deeper buyer engagement with smarter AI-driven insights, expand our product categories and geographical footprint, scale our embedded finance capabilities so more MSMEs can participate in India's growth and relentlessly improve the platform experience so that once a buyer comes to build a pivot, they never want to go back to the old ways of doing things. Before I hand over the call to Hemant for financial performance and covering other businesses, let me spend some time on macro scenarios. We are living in a period where the world is simultaneously witnessing extraordinary opportunities and unprecedented uncertainties. Across continents, businesses and governments are navigating a rapidly changing global order shaped by geopolitical tensions, inflationary pressures, supply chain realignments, technological disruptions, climate concerns, and changing consumer aspirations. Crude oil prices and volatility in raw material costs continues to impact manufacturing and global trade. Logistics networks that once prioritized efficiency are now being redesigned for reliability and strategic security. Across sectors, from chemicals and metals to technology and consumer goods, organizations are balancing growth ambitions with cost discipline and operational agility. At the same time, the world is undergoing one of the biggest technological transformations in history. Artificial intelligence, automation, digital platforms, data-led decision-making are reshaping industries at an unprecedented pace. The competitive advantage today is not merely scale, but the ability to innovate faster, adapt quicker, and stay closer to the customer needs. Yet, amidst these global challenges, there is also optimism. Emerging economies, especially India, continue to demonstrate resilience and long-term growth potential. India today stands out as one of the fastest-growing major economies, supported by strong domestic consumption, infrastructure investments, digital transformation, manufacturing expansion, and a young entrepreneurial population. However, in the backdrop of a recent caution expressed on mindful spending and responsible The message for businesses and households alike is clear. This is time for calibrated optimism and disciplined decision-making. While India continues to remain one of the world's fastest-growing major economies, global uncertainties including geopolitical tensions, commodity price volatility and inflationary pressure require a balanced approach towards expenditure and investment. The emphasis today is not on slowing aspiration but on prioritizing investment. efficiency, value creation, and long-term sustainability. For businesses, this translates into sharper capital allocation, cost leadership, and productivity enhancement. Such periods often strengthen economic resilience as disciplined spending combined with strategic investments creates a stronger foundation for sustainable growth in the years ahead. Let me now hand over the call to Hemant for his remarks. Over to you, Hemant.

Thank you, sir, for your remarks. And one thing before I start, history has shown that moments of disruption often create the foundation for the next era of growth. The global environment may be complex, but it is also opening new avenues for collaboration, transformation, and value creation. Those who can adapt with agility, invest with foresight, and execute with discipline will define the future of industry and enterprise. With this note, I would start with our biggest business, building materials, which include cement, paints, and B2B e-commerce. Himanshu sir has already covered paints and B2B e-commerce. Let me give you key highlights of our cement business. Alta Tech continues to strengthen its leadership in one of the most important sectors driving India's infrastructure and housing growth story. In April 2026, Alta Tech crossed a historical milestone of 200 million tonnes per annum of total grey capacity, which makes Alphatac the world's largest cement company outside of China. To put that in perspective, we have nearly doubled our capacity over the past six years, and we remain firmly on track to reach 240 plus million tonnes per annum by March 2028. On profitability, Total operating EBITDA per ton stood at the highest mark of Rs. 1,253. Over the past two fiscal years, FY25 and FY26 combined, we have delivered cumulative efficiency gains of Rs. 185 per ton. This is not a one-off. It is the result of sustained focus on fuel mix optimization, logistics efficiency and and operational excellence across our plants. These structural cost levers give us confidence that margin will continue to improve even in a competitive pricing environment. The board of directors of UltraTech Cement has announced a strong dividend payout of Rs. 240 per equity share subject to the shareholders' approval at the AGM. The dividend declaration underscores UltraTech's resilient business model backed by a long-term commitment towards scale, operational efficiency, sustainability and nation building. For Gassim, the total cash inflow from this dividend would be nearly Rs. 4000 crores, excluding taxes. Coming to Cellulosic Fiber, we stand before you with tremendous confidence in the trajectory of this business. That is not just keeping pace with the global trends, but actively shaping the future of sustainable textiles. Let me set the stage with a powerful fact. Cellulosic fibers are the fastest growing segment in the Indian fiber basket, expanding at a CAGR nearly 2x that of other fibers. This is not a temporary blip. This is a structural shift driven by sustainability, cotton constraints and rising consumer demand for eco-friendly fabrics. Our phase 1 liaisal capacity at Harrier of 55,000 tons per annum part of the total proposed 110,000 per annum expansion is progressing well. The macro environment is firmly in our favor. China's operating rates have climbed to 92% in Q4 up from 87% a year ago signaling robust global demand. At the same time China's inventory level has dropped to just 11 days, a clear sign that supply is tight and demand is accelerating. Our cellulosic fiber segment delivered revenue of Rs. 4,614 crore in Q4 FY26, a commanding 14% increase year-on-year. Full-year revenue surged to Rs. 17,104 crore from Rs. 15,897 crore up 8% year on year. This growth was powered by dual engine of volume expansion and a deliberate pivot towards higher value specialty fiber. EBITDA stood at Rs. 588 crore in Q4 up two times and full year EBITDA was up 15% to Rs. 1751 crore from 1,524 crore. This was not just about volume, it was about operating efficiencies, a favourable product mix and the tailwind of the nine pulp prices. Now let me talk to you, let me walk you through the strategic positioning of our chemical division, which continues to be a cornerstone of Graphene's diversified growth story. Our chloralkali business maintains undisputed market leadership with an installed capacity of 1.5 million MTPA. We are expanding from 1,505 KTPA to 1,530 KTPA while evaluating additional capacities driven by growing demand from diverse end-user industries like alumina, organic and inorganic chemicals, textiles and FMCG industries, etc. Caustic soda sales volume stood highest ever at 321,000 ton in Q4 and 1,232 kT for full year FY26. Specialty chemicals revenue grew 5% year on year. However, higher input prices, mainly ECH, practically partially impacted profitability in that segment. Our revenue mix is evolving well. Specialty chemicals now contributes 27% and chlorine derivatives 22%, reflecting our deliberate shift towards higher value downstream products. Our financial services subsidiary, Aditya Birla Capital, represents a compelling play on India's long-term financialization story. That's by a diversified and scalable financial services platform spanning lending, asset management, insurance and wealth solutions. As India witnesses rising household savings shifting from physical to financial assets, increasing insurance penetration and rapid credit formalization, the company is strategically positioned across multiple high growth segments rather than relying on a single business cycle. Its ability to consistently grow revenue and expand the lending book and asset under management demonstrates strong education capability even amid a volatile macro environment. With rising incomes, formalization of the economy and expanding digital infrastructure and increasing investor participation through SIPs and mutual funds, we believe that Aditya Birla Capital is well-placed to participate in multiple structural growth trends simultaneously, making it a diversified proxy for India's evolving financial ecosystem. Aditya Birla Capital Board has approved capital raise of Rs. 4000 crore by way of equity shares through preferential allotment. Given the growth prospects, Racim's board has approved an investment of Rs. 2880 crore, maintaining our stake at 52.3% on a fully diluted basis. Coming to the other segment, both renewable and textile business has delivered robust performance. For the quarter, revenue for the renewable business grew by 60% year-on-year and textile business was higher by 14% year-on-year. Renewable EBITDA grew by 55% and textile business EBITDA stood at Rs. 35 crore compared to a loss of Rs. 8 crore. I am pleased to share that the Board of Grasslands has announced a final dividend of Rs. 500% amounting to Rs. 10 per equity share, underscoring our long-standing commitment to create wealthy quarter shareholders. This marks the 63rd consecutive year of uninterrupted dividend payments, reflecting our financial strength, resilience and consistent focus on rewarding shareholders across business cycles. With this remark, I will now open the 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 handsets 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 Mahersha from Nomura. Please go ahead.

Hi sir, congrats on a good set of numbers. First question is on paints. Wanted to just understand your view on how should one think about the growth from here on as you've already attained scale with respect to dealer reach and tinting machines similar more to quite a few of the legacy players. So how much more growth do you foresee coming from further penetration of dealer reach and increasing tinting machine reach or will the growth largely come from improving throughput? So that's my first question.

Thank you, Mahesh. So we are very confident of growth and the first and foremost industry is likely to move from a single digit growth to a double-digit growth in FY27 while we observe the impact of raised prices and elasticity of demand. But all trends show that this is going to be a double-digit growth here. With this, as far as Opus is concerned, there is a lot of growth that is possible for us. And we see growth both in numerical distribution expansion and improved throughput let me cover the numerical distribution expansion we are currently at the presence on large and small towns to 11 500 we are anticipating to cross this to beyond 15 000 by the end of this financial year and the second is even the existing towns there is a lot of scope for us on overall basis because the total number of dealers in the industry is excess of 100,000. But the largest component of growth has obviously come through throughput with the existing dealers having faced its success with one range of our category of products. For example, some of them have done immersions and others have done enamel. They, with the confidence with the first range of products, they are likely to be able to expand to the entire range. I repeat, we have emulsions, enamels, waterproofing, wood finish, distemper, and for our franchise partners, wallpapers and exclusive products. We also see expansion through expanding the retail networks. So we remain very confident that we achieved a triple-digit growth last year and we remain confident of a high double digit growth. Sorry, Satin, I'm going to pause for a minute.

Yeah, so like Simanju said, just to reinforce the fact that numeric expansion across the market for dealers will continue to play an extremely important role. But like Simanju said, expanding the product range will be critical to build the throughput per dealer.

That you mentioned.

So my second question is, if you can talk a bit on the profitability front on the paint sector, you highlighted in the PPT that there is improvement in performance of paints when you speak about the building material segment, which was also led by paint on the EBITDA level. Is this largely due to getting scale or given that now you've got some scale, there is some reduction in rebates to dealers or there is a reduction in the discounting. How should one think about that? And one clarification, you had highlighted that three years after your full operation, you would want to reach 10,000 crores. So should we consider FY26 as first full year of operation? Because It's only been two quarters since your sixth plant has commissioned. So FY28 would be the third year or FY29 you would be considering as a third year. So that was my second question.

So FY26 is what internally we're taking as our first full year operation. Even though the pains... or the sixth plan started in the third quarter of last financial year. So we don't want to do it. We want to take a stiffer target for ourselves and we will take first full year operations of February 26. So in the sequence of profitability, we want to again repeat in the order of our priority. Our order of priority is number one. We want to become the number two decorative paint operator in India. Second sequence of priority for us is 10,000 crore. And third sequence of priority is profitable. We've already used all the three words together, but we're not splitting them in the sequence that we would like to achieve. Having said that, where does the one profitability come from? Profitability for us, we have invested ahead of time on fixed costs. And you can see that both in terms of largest number of sales and service costs. And second is ahead of time investment in branch. These are both are in the fixed cost nature and as sales goes up, they will cover and give us a better benefit. The second profitability angle is to get better returns because of our variable cost and the variable cost will again come by us being able to A, get better rates. as our buying ability increases, so we can negotiate better prices. And with the fixed plants coming in, optimization of our plants on power, optimization of our logistics costs, all of this will result in bringing down our wearable costs. There is also some optimization on... products as we introduced most our products with a single supplier we are in the process of bringing in the second and the third supplier which gives us as we bring in competition among raw material suppliers you will also get not only scale benefits but other level of cost benefits. So these are the roots of profitability but as I mentioned the sequence is for us remains number two position, then getting a revenue and finally achieving profitability.

Got it, sir. Very clear and thank you for your clear answers. Wishing you all the very best.

Thank you. Thank you. The next question is from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead.

Hello, sir. Congrats on a good set of numbers. I have couple of questions. So, firstly, in your earlier remarks, you mentioned that we are within striking distance of becoming the number two player. I think last year, the number two player in India did approximately 10,000 crores of sales. So, how close are we when we say we are within striking distance? What is our range that you are mentioning here?

I will clarify this. I will read from the notes that I received. the presentation we made, combined the revenue of Birla Opus plus Birla White Kutty business, which is what is measured by all of the paint measures, brings us nearly to the level of the existing number two excluding the industrial revenue. So, when you quote a number That number is annual number and that number includes industrial plus decorative. When we quote a number, we quote only the decorative part of the business. We include the footy side of the business. That is the statement that I made as a starting point. Which is the current situation as far as quarter 4 of FY26. Going forward, our ambition and stated ambition is on its own below us, in the decorative paint business, only in the decorative paint business, not including the industrial paint business, will like to be number two. I hope it's clear. The numbers that are quoted, we have internal estimates, we do market research, and we get firm confirmations of multiple sources, and we are very confident that the numbers that we have are trending toward what we have quoted.

Thank you, sir. Very comforting. Yes, sir. That provides a lot of clarity. My second question is related to something one of the previous participants asked. So, with respect to throughput per dealer, where would we stand versus industry benchmarking and what is the leeway that is there for growth there?

I am going to do it. Yes, sir. So, hi, this is Sachin here. When you look at dealers, dealers operate typically in a various scale of operation, whether it's an A-class, B-class, C-class, D-class dealer, depending upon what kind of business they are doing. In each of these subsets, we have a fair market presence and our throughput is in line with our fair market presence. And consequently, that gives us a fair bit of comfort that We are aligned to the industry throughputs and in each of these dealer sets.

So, just to add, obviously, we are not the market leader. So, the throughput is best for the market leader. They have in our assessment about between 20 to 25 percent additional dealers. It is the reason why they are such a strong market leader. This is the throughput that they get from the dealers. Because as Sachin mentioned, the proportion of A category dealers in business is significantly higher than our proportion there. In the case of number two, we have to focus on number one and number two as we have asked for the number three. They have a different mix. They have a reverse pyramid that they have a a larger proportion of a category which constitutes their business and disproportion. Our business is far more democratized because we are more national presence as well as evenly distributed. That's why our effort is more to be able to through the route of distribution to expand throughput in each of the categories of business whether it is A, B, C and D. far more than what we currently have. This is what I can give you at this point of time.

I get the strategic part of what you are saying, sir. But I just wanted to know a rough indexing in terms of because we have started some time back. I would not expect a recently started dealer to have a high throughput. But some of our earlier dealers, have they reached fairly like a comparable level throughput to some of the established players or are we still like further away from that? I am just trying to understand if we will get more growth from the existing distribution because we are still like relatively new in the market in terms of the number of dealers that we have over 2-3 year period. If you could give me some color on that, it will be very helpful.

Right. So like I was mentioning about the four different classes of dealers A, B, C, D, just to give you a rough index, while each sub-segment has been growing robustly in line with our overall growth, just to give you a perspective from a range lens, the top dealer would be stocking almost two to two and a half times the bottom dealer, as well as if I were to look at throughput per dealer, it ranges between four to five times the bottom dealer. So obviously our strategy of focusing on the top dealers, driving business from the top industry contributing dealers is also paying rich dividend. Bases are market, go-to-market strategy of expanding the range availability in the large dealer sets.

Incidentally, I'll just add for your benefit so that you can absolutely clear. Our older dealers who spend more than 18 months with us, our counter share is significantly higher, as high as 25-50% in these outlets and their throughput matches with legacy phase operators. So their throughput as the dealer becomes older and is comforted with entire range of products is there, he is tending to achieve the similar throughput as a legacy dealer is. If that's the answer that you're looking for.

Sorry to interrupt. May we request Mr. Srinivasan to please rejoin the queue. We have other participants waiting for the turn. Thank you, ladies and gentlemen. In order to ensure that the management is able to address questions from all participants, we will request you to please limit your question to two per participant. If you have a follow-up question, you may rejoin the queue. The next question is from the line of Amit Gupta from ICICI Securities. Please go ahead.

Good evening, sir. This is Naveen Sahadev. Am I audible? Yes. Oh, thank you. So thank you for the opportunity. Sir, my first question was on the capital allocations. Now, of course, our subsidiary has, like, you know, announced a significant dividend. And just today also there is an update in terms of 2,880 crores being invested in AB Capital. Okay. How should one look at it?

I'm sorry to interrupt, Mr. Gupta, but we are unable to hear you, sir.

Okay, I'll just repeat again. Am I audible?

Yes, please go ahead.

Yeah, so my first question was on capitalism. That apart from, let's say, investment, which we are like, now it's all announced in capitalism.

I'm sorry to interrupt, Mr. Gupta. We are unable to hear you. May we request you to please take your connection and rejoin the queue? Thank you. The next question is from the line of Siddharth Mehrotra from Codex Securities. Please go ahead.

Congratulations on the big set of numbers and thank you for the opportunity. So continuing on the previous participant's query, we noticed that out of the cyber dividend of around 4000 odd crores, we are going to invest roughly 2900 odd crores in our MBSC business. So just wanted to understand, given the fact that we used to distribute it to our shareholders, what will be the capital allocation strategy going ahead?

So I don't know what the term of capital allocation, just from a cash flow perspective, you can do your maths, it's straightforward. Net of tax that are we receiving from our subsidiary in the cement, we would prefer to allocate that fund to a dividend to our existing shareholders as well as increasing, maintaining our stake in Aditya Birla Capital. The entire revenues and habitat generated from Grasim will be reinvested in growth of Grasim businesses. I hope that's clear.

So, just to sort of clarify on this, whenever we need to increase our stake or maintain our stake, that is the only time when we will be sort of using the dividends.

Otherwise, there will be no no, we are not talking of a long term policy. I am giving you the current allocation of fund. Yes. At this point of time, we have maintained for the last three years, we have maintained that we are in a growth business. We have introduce two new growth businesses and we have to stabilize these two new growth businesses and Grassland needs its support around there. So, we are supporting the new businesses by reinvesting the surplus that is getting generated from the core businesses. As well as, now, as far as this year is concerned, we have allocated the cash that we received to be able to expand, to be able to maintain our stake in Aditya Billah Capital.

Got it sir. So basically for other sort of growth businesses, we will be sort of using internal approval. This is a one-off measure. Is that understanding correct?

Yeah, yeah.

This is one-off measure. Yes, yes, absolutely.

May I just ask a follow-up? What is our, since we are past our peak CAPEX phase, what sort of CAPEX guidance should we sort of build in for the respective divisions now? CAPEX guidance for 2027, we will be able to share you next quarter. We are just working on it. Give us some time. Okay, sir. Thank you. Thank you for the opportunity.

Thank you. The next question is from the line of Satik Kumar from Jefferies. Please go ahead.

Yeah, good evening, sir. Congrats for good results. My first question is on the new businesses. Can you, I mean, while you have talked about it, but can you just add again on profitability path for pains and pivot business as companies start moving towards revenue targets? individually for these segments in terms of profitability and when can we look forward to get separate disclosures for the segment? We will start with B2B. Okay, hi Pratik. This is Sandeep here. I will give you a little bit of background on the profitability path that Vellapruvit is on. You know, we had mentioned this as part of our results in Q3 as well. We have been steadily, of course, our growth momentum has already been shared in the opening comments. You can see that we have been, you know, our growth momentum was far ahead of the guidance that we have given. On the profitability front, even our margin and EBITDA direction has also been very, very positive. Our goal for this financial year, FY27, is to exist with EBITDA break-even and we are well on that path. It might actually happen a little sooner as well. But fairly confident that we will exit this financial year with a bit of a break. And the priorities remain very, very clear that we will continue to drive the revenue growth trajectory. We will deepen our presence in the category. But at the same time, we will exit this financial year with a bit of a break.

On the claims profitability, if you There are two parts to the profitability. One is contribution and second is EBITDA. Now, we had a significant improvement in both gross and net contribution in quarter 4 and we expect to maintain that momentum going forward. As regards investment that we are doing, we have a fixed cost which is now currently in a position for a much higher market share. Because we are investing in Manpower on a pan-India basis, both sales and service, as well as investing in brand so that we are ready for tomorrow. So, as the contribution improves and scale improves, the EBITDA loss has a glide path on a quarter-on-quarter and a year-on-year basis till we reach the 10,000 crores. And the glide path has already started. As regards final reporting, we should start that shortly.

Thank you. Another question on capital allocation again. I know you talked about investing in AB Capital, but how about within your organic business? You obviously incubated two new businesses recently. a few years earlier. Do you also evaluate investing in new businesses which can further add to your organic businesses in next few years? So, we have already announced expansion of our Telvisek fiber business where at Harrier, we are adding capacity of Lyosil of 110,000 ton per annum. First phase is already on progress and second phase we will announce. That is the capex plan right now we are implementing and further capex plan as we get approval in terms of capital expansion we will share with you.

Just for a one line answer on this is as of now we have enough on our plate we want to stabilize our cash flows before we look at any further. So there is no further business to be disclosed at this stage.

Sorry to interrupt. May we request Mr. Kumar to please rejoin the queue? Thank you. The next question is from the line of Amitbu Rohat from Millara. Please go ahead.

Hi. Good evening. Thank you for this opportunity. Am I audible? Yes. Two things. One, I wanted to understand. You talked about two drivers for growth. One was distribution expansion. Second is throughput increase. And within that, you highlighted that new product launches will also become a very important part in terms of. So, just wanted to understand, are we under-indexed in terms of product offerings when you compare it with the number one, number two? That was first question. Second, is the, I mean, you indicated the targets remain same despite raw material prices increase and all. Is there any, I mean, plans of some of the schemes and all are we looking at? While you clearly highlighted that 10% scheme still continues. But just wanted to check if there is any business plan change that could be there or you may look at it maybe after a quarter or so. How do I think about it?

So, Amit Sachin here. Thank you very much for your question. As far as product range is concerned, like I want to mention earlier, we have a full stack of products which have already gone into the market. In fact, in our franchisee stores, we have a large set of exclusive products also which have been launched in the market. And today we can confidently say that a dealer can be extremely satisfied and continue to run and scale up his business with the Vidla Opus range of products. Life for life, we are at even seasons with respect to competition. While we will continue to identify wide spaces and continue to add more products in the future, but as things stand right now, we are full stack up. With respect to your second question on competition, pricing and, you know, strategy in the market, while Himantoo very categorically laid down the glide path of first priority being the number two player in the decorative paints industry, second achieving the 10,000 crore turnover, and the third being profitability. Our entire endeavor will continue to ensure that we are competitively poised in the market to ensure the priorities are achieved. So, if there is a need for being, you know, so then we will continue to act accordingly in the market.

Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.

Yeah, hi. Thank you for taking my question. So two questions. First, as you scale up both Pivot and OPA, you will see benefits of operating leverage kicking in over the next two years. Now, if I see your implied profitability numbers, you have been clocking 3 billion pre-tax losses every quarter for the last few quarters. Is it fair to say that this will come down materially through the year? or is there a case that it may remain sticky for longer? So that's my first question.

Yes, it will come down.

Got it. My second question is now that, sorry for harping it again, you have not guided on the longer-term capital allocation strategy, but given AlterTech and Itervilla Capital are the two subsidiaries where your shareholding is more than 50%, Is it fair to say even on the longer term perspective, you would want to maintain your 50% plus shareholding in both these businesses?

At this point of time, the answer is yes.

Thank you and wish you all the best.

Thank you. The next question is from the line of Naman Parmas from Nivesha Investments. Please go ahead.

Yeah, good afternoon. Thank you so much for the opportunity and congratulations on great setup, Naman. My question is specifically towards your other business segment, specifically mentioning towards the insulator division. So currently, if we see on that description, there have been very big shortages on the transmission lines and all. So how are we planning towards adding the capacity on the insulator division? And if you can break us, how was the overall sales in the insulator division in the current year and the capacity utilization?

Okay, thanks for the question. You are absolutely right that the electrical segment is going very well. And there is a big order backlog versus what the market is demanding. And while we post this to others, you can imagine underlying our set of growth and numbers on insulators has been good and will continue to remain good for some time. Our insulator business is divided in three parts. So we have a porcelain business. We are actually one of the world's largest insulator players and we are probably the world's only insulator player that operates in porcelain, polymer long rods and polymer hollow composites. As far as the porcelain business goes, we will only do productivity initiatives. We have no plans to may increase our base capacity. As far as polymer long road goes, we have recently done some capacity expansion. Those are sold out. And we are looking at further investing, increasing the capacity in our hollow composite business. So we are quite bullish on the segment. But it's not like we are planning to suddenly double or triple our capacity. Our aim is mostly to to gain operational efficiencies out of our existing assets and to incremental investments in polymer long rods and polymer components.

So currently we have a capacity of 50,000 tons, right, in Suriga.

And we are expecting to remain at similar level, but we will be thinking more adding on the composite or the polymer, given the market has been shifting from procylin to composite and

So you will be thinking... I'm sorry, you can't think of these capacities in terms. Depending upon the size of the insulator, the number can change. You know, if you have studied this process, if you make a larger insulator, it takes a longer cycle time, right? If you make a smaller insulator, it makes a smaller cycle time. And we supply this to ETC contracts. So, we supply against orders. It is not like our caustic business or our epoxy business. We do it by number of insulators and we do it make to order for very specific projects for very specific customers.

Understood. Lastly, if you can provide the sales number for the insulator for the FY26, it will be very helpful and also the EBITDA.

I think we have stopped disclosing this several times. couple of years ago. It's part of our others. I don't think it's our intent to lose it.

Okay. Thank you so much for answering the question.

Thank you. The next question is from the line of Rahul Singh, an individual investor. Please go ahead. Mr. Rahul Singh, please go ahead with a question. Your line is unmuted. Mr. Rahul Singh, may we request you to please unmute yourself and proceed ahead with your question. As there is no response from the participants and even that was the last question for today. We would now like to conclude the conference. On behalf of Grasm Industries, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.