Grasim Industries Limited

Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings call hosted by Aspi Patel Industries. As a reminder, all files 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 this conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand over the conference call to Mr. Ankit Panchmatia, Head Investor Relations of Prasam Industries. Thank you and over to you, Mr. Ankit.

Yeah, hi, thank you. Good evening and thank you for joining Latham's first quarter financial year 2027 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 question statement highlighted in the last slide of our presentation. Our management team is present here on this call to discuss our results and business performance. We have with us Mr. Hemant Shukampanya, Managing Director, Aspi Patel, Anil Rustogi, Anit Kumar Jain, Sailesh Kumar Jain, Sailesh Kumar Jain, Sailesh Kumar Jain, Sailesh Kumar Jain, Sailesh Kumar Jain, Sirilocik Fashion Yarn and Insulator Business, Mr. Variraj Gulgarmi, Business Head of Sirilocik Fibres Business, Mr. Sachin Sahai, CEO, Birla Oppas Veins, and Mr. Sandeep Kumrawalli, CEO, Birla Pivot, which is our B2B e-commerce business. Let me now hand over the call to Hemant Sir for his opening remarks. Over to you, Sir.

Thank you, Ankit. Good evening, good afternoon, or good morning, as applicable. Thank you to each one of you and thank you for joining the Grasim Q1 Financial Calls 2027. Let me begin with the headline. Financial Year 26 was a landmark year for Grasim and we continued the same momentum entering Financial Year 27. In Q1 FY27, we achieved highest ever revenues of Rs 48,716 crores. with a year-over-year growth of 21%. I remember not too far away, two years ago exactly, the quarterly run rate of revenues used to be around Rs. 32,000 to Rs. 33,000 crores and today we are already reaching about a quarterly run rate of nearly Rs. 50,000 crores, a whooping 1.5 times growth in quarterly revenues which is A two-year CAGR of 25%. I want to draw your attention to the consistency behind these quarterly numbers because a single strong quarter proves very little. This is now our 24th consecutive quarter of YNY revenue growth. What that tells you is that our performance is not resting on one business or one favorable cycle. The core, which is our cement, cellulose fiber, chemicals and financial services business are compounding. The new engines, which are our range and B2B e-commerce business are multiplying. I would like to draw an analogy here that this combination of core and growth business portfolio is doing what an all-weather portfolio is meant to do, that is deliver consistent returns. A key highlight this quarter is the accelerating momentum in our standalone business. Standalone revenues for the quarter 1 of 2027 grew at a faster rate i.e. 28%, year-on-year to Rs. 11,795 crores. More importantly, it's incrementally becoming a larger and more meaningful contributor to Graphene's consolidated growth journey. The Vita more than doubled with a 107% growth to Rs. 1094 crores. This clearly shows that the standalone portfolio is not only growing faster but also scaling with speed and improving profitability. Let me now start with some macros then we'll take you through the business one by one. The global economy continues to navigate an increasingly complex landscape. While inflation has moderated across several developing markets and central banks like U.S. Federal Reserve has maintained a cautious and data-dependent stance, inflation has eased materially from its feet. The Federal Open Market Committee has still reiterated that the path of monetary policy will continue to be guided by incoming data, particularly on inflation and labor markets. China continues to face a relatively subdued recovery led by weakness in its property sector and manufacturing activity, while Europe is witnessing modest growth amidst softer industrial demand. Geopolitical development has emerged as one of the most significant variables shaping business sentiments and global trade. The ongoing conflicts in parts of Europe and the Middle East coupled with the evolving trade policies and supply chain realignments have increased uncertainty across global markets. These developments have at times disrupted shipping routes, elongated transit times and created intermittent challenges around the reliability and pricing of key commodities and raw materials. Trade costs and energy prices have also witnessed bouts of government cities making procurement planning and Inventory Management significantly more dynamic than in the past. Against this backdrop, India continues to remain a bright spot in the global economy. More importantly, the RBI in its latest Monetary Policy Committee meeting acknowledged the resilience for domestic growth and revised its FY27 GDP growth forecast upwards to 6.7%. Reflecting confidence in India's underlying economic fundamentals. Strong domestic consumption, sustained public infrastructure investments, improving private capital expenditure and healthy financial sector fundamentals continue to underpin economic growth. Let me now start on business performance and starting with claims. Two years ago, the law of us started with a promise. A promise to not merely participate in the industry but to fundamentally reshape it. We articulated an ambition of building India's second largest decorative page company and more importantly creating a brand that would stand for quality, innovation, reliability and consumer trust. Today, just two years later, I am proud to say that Villa Office has already become one of the largest players by installed companies Manifesting Capacity and emerged India's third largest decorative paints brand by revenue. This quarter, Villa offers delivered revenue of Rs. 1,661 crores up by 64% year-on-year and 17% sequentially. We have cancelled our number 3 positions with market share gain of further 30 basis points sequentially that is on a quarter-on-quarter basis. And when you include villa-wide kutti, our combined share is now nearing the early teens. For considering the total market size of Indian decorative paints industry as highlighted in slide number 25 of our earnings presentation, we include reported revenue of all the listed paints and kutti companies. Plus for overall picture, we further include Segment-Wide Sales of Remaining Companies in the Organized Sector Estimating the Segment-Wide Sales of Wood Finish, Construction Chemicals, Decorative Paints, and Foot Paints, etc. Hence, our market share is representation of entire organized decorative paints industry. Let me be plain about what this means. In roughly two years, we built a revenue share position that took most Many decades. This was not an easy quarter to grow in. We absorbed a genuine and an unprecedented raw materials cost drop. We chose to manage it through phased price increases rather than one blank correction and the cumulative impact in Q1 FY27 was 8.8% and some of the price increase impact has flown to Q2 FY27. That decision narrowed our price depression with industry. Some of you will ask whether we have given up our value advantage. We have not and our resolve is unchanged. We will prioritize market share gains and we will deliver the revenues we have guided to. We are building a franchise, not optimizing a quarter. On profitability, losses narrowed during the quarter, partly aided by lower cost carryings Inventory and lower advertising spend compared to Q4 FY26 when we have invested heavily behind high-impact campaigns around the T20 World Cup and IPL. In the current quarter, i.e. Q1 FY27, we saw normalized advertising at its intensity. Having said that, our commitment to brand building remains unchanged. Advertising spend will continue to be elevated to demand generation opportunities with higher investments expected during the seasonally stronger period as we continue to build villas of earth into a powerful national brand. Our performance this quarter is driven by disciplined execution across five strategic villas. I want to cover them one by one. First, distribution is emerging as a powerful engine of scale. Villa Opus has rapidly expanded its presence to 12,100 towns with more than 55,000 dealers built at least once and 1,450 plus exclusive branded franchise retail outlets spread over 800 towns. This gives us one of the deepest and most visible market footprints in the industry, enabling stronger consumer success, sharper brand experience, and Faster Conversion at the point of sale. As per our estimates, this is now the largest organized trained retail network in India, a significant strategic advantage for a brand that is still in the early phase of its growth journey. Our institutional talent is also scaling with momentum growing 85% year-on-year and 11% quarter-on-quarter with nearly 11,000 project sites built during the quarter. Villa Office Products has secured 83 plus specification approvals from various governments and other departments across cities with a similar number under different stages of approval. With a robust pipeline of 47,000 sites at various stages of work, the institutional business is becoming a meaningful long-term growth vector. Second, our engagement with contractors and influencers is building advocacy at scale. Strong consumer demand and deep contractor connects continue to drive secondary sales with growing active contractors and painters applying Villa Office products during the quarter. This is an important validation of product quality and trust because every contractor or painter who chooses Villa Office is effectively putting their own reputation behind our brand. Our digital first contractor platform, Opus ID, is strengthening this relationship further by creating a more connected, rewarding and scalable engagement model. We continue to elevate the painters and contractors ecosystem through industry-leading schemes and loyalty benefits that remain unmatched. We are happy to report, until now, nearly 9,25,000 painters and contractors have applied our products At least once an experienced Birla Opus quality and lakhs of these contractors return every month to continue applying our products. At the same time, Birla Opus is gaining strong traction with architects and interior designers. With an AID partner network now crossing 4,400 active firms across 100 plus towns, making it the second largest AID network in the industry. With expanding influencer ecosystem, Strenthens our premium positioning and improves our ability to shape demand at the design and specification stage. Third, our product portfolio is evolving towards premiumization and sharper market relevance. During Q1 FY27, Villa Opus launched 10 new products to strengthen its exclusive range for institutional, franchise channels and regular products for dealer channels. These launches Deepen our participation in high potential segments and expand our ability to serve customers across price point applications and aspirations. With this, the portfolio has grown to 228 products and 1,945 STUs, giving will offers the depth and flexibility required to compete at national scale. Importantly, the premium and luxury portfolio now contributes Approximately 65% of shift value reinforcing the sense of our premiumization journey and improving the quality of our revenue mix. This also puts a fact forward that we did not buy shares at the bottom of the market. We won it at the top where brand preference is the hardest to earn and margins are most durable. Fourth, brand resilience continues to rise at a remarkable speed. We continue to build on our already number two position in unaided top of mind recall. With 90% plus brand awareness, the law of us is rapidly moving from being a new entrant to becoming mainstream consumer choice. This has been enabled by sustained, insight-led and innovative campaigns that are making the brand more visible, more memorable and more relevant across consumer segments. Our 10-question free paint proposition continues to be reinforced through newly launched three hard-hitting advertising films focusing on how Villa still offers higher consumer values in this inflationary paint environment. Separately, regional campaigns such as celebrations of Holi, Ganesh Chaturthi, Onam, etc. are helping us convert cultural movements into demand opportunities. This combination of national brand building and local market activation is strengthening consumer pull and enhancing the distinctiveness of builders in a highly competitive category. Paint Car, our organized painting services platform is scaling rapidly and is now available across 6,700 plus pin codes on a pan-nature basis. It is helping us bring a more professional, Transparent and hassle-free painting experience to consumers across India. To our knowledge, Paintcraft is the only organized painting services platform offering 6 months and 12 months no-cost PMI financing, making premium painting solutions more accessible at a time when consumers are increasingly becoming value conscious. Complementing this is Opus Assurance, are industry first service warranty program which strengthens consumer confidence with a trusted end-to-end service promise. Together, paint craft and focus assurance are helping builder offers move beyond product sales into a more complete consumer solutions model. The fifth strong pillar is manufacturing excellence. Our integrated manufacturing footprint of 1,332 million litres per annum Capacity continues to provide significant competitive advantage. This quarter marked our highest ever production with capacity utilization continuing to improve steadily across all six plants. The rapid scale-up of flow of goods continues to validate our strategy and execution capability. Every quarter, we strengthening our distribution and contractor ecosystem and enhancing brand preference and expanding our market share. What I want to take away from this retail narration is a clear fact. Revenue is up 64%. Market share has moved up again. Instruction sales grew 65%. The premium and luxury portfolio continues to pursue 65% of value. And our reach spans over 12,100 towns, 147 tech posts, 1,450 plus exclusive retail outlets. and 90% brand awareness. At the same time, even as the five differential industry pairs have narrowed, our competitive intent has not opened. We are here to compete, to build scale, and to win shares in a disciplined manner. The message here, market share gain and guided depth of growth remains our priority. Supported by widening distribution networks, rising strength in brand salience, Deepur Influencer Engagement and Manufacturing Footprint Build for Scale. We took a cost shock on the chin this quarter and continue to invest because we are not optimizing for one quarter, we are building Billa Offers into a Rs. 10,000 crore brand by FY28 and every leading indicator tells us we are firmly on that path. Now, let me turn to Billa Secrets, our 650 e-commerce system and and to what I think is most underappreciated story in this portfolio of graphene. Revenue for this quarter grew 75% year-on-year, 2,508 crores. Our annualized run rate continues to trend above 10,000 crores. Let me put that in perspective. This is a business we started from nothing and it is now written at a 5% Very few businesses in India have traveled that distance in such a short time. You will see that they do it sequentially on a quarter on quarter basis. And I would rather explain it than have you observe it. Three things happened. We were starting at a high pace. The Middle East crisis directed real volatility into community markets. and in response our customers picked exactly what disciplined procurement teams do in volatile markets. They bought the treasured base and optimized their inventory. That is demand timing effect, not demand loss effect. We saw no deterioration in the health of the platform. In fact, transactions kept improving through the quarter. Beyond revenues, what the quarter actually tells us that they underlined the platform what we have is tensing on every measure we track. Our revenue mix is getting better, not just bigger. We have added high potential attitudes across our three broad categories, building materials, non-ferrous and chemicals. And we continue to deepen these two strategies across new ones. That is what builds the principal platform. Ferrous only just builds the capital. Fiber levels more than doubled year on year. That is of a low base and I want to be honest about that. But fiber level is a margin lever in any marketplace and the direction of travel matters more right now than the absolute number. So Zuma traction remains strong throughout improving transaction counts, sustained new buyer addition and robust repeat purchasing from existing buyers. Repeat Patel is a metric we watch most closely because it is one a buyer cannot be persuaded into. They come back because the platform works and the new buyers are well certified across infrastructure, construction, manufacturing and industrial segments spanning both large and mid-sized enterprises. We are not substituted on any single end market. It is worth stepping back to remember what this business actually does Indian B2B trade in these categories has historically run on a phone call relationship and paper, opaque pricing, slow payment, and uncertain delivery. We are replacing that with an integrated digital platform. For a buyer, that means the ability to source quality products, compare prices transparently, access working capital, track deliveries in real time, and manage the whole procurement process in one place. For a seller, it means growing sales, improving operational efficiency, accelerating cash flows and reaching markets they would never have established on their own. Both sides get something they genuinely could not get before. That is why this platform is compounding every satisfied buyer brings sellers, every good seller brings buyers. Underneath the market place, We build a robust digital financing ecosystem, expanding working capital and credit solutions for both buyers and sellers through strategic partnerships with leading financial institutions. This is the piece I would encourage you to weigh most heavily. In V2V trade, credit is the real constraint, not catalog. By solving for working capital alongside the transactions, we make assets difficult to disintermediate. Talking about profitability, in this business our position is unchanged and our confidence is high. We are not chasing breakeven by shrinking, we are reaching it by scaling into a cost base we have already built. Till our pivot remains on track to achieve a better breakeven by exit of FY27. Now I hand over the call to our CFO, Mr. Hemant for his remarks on company's financial performance and remaining businesses. Over to you, Hemant.