Grasim Industries Limited (GRASIM.NS) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q1 FY '26 Earnings Conference Call hosted by Grasim Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head, Investor Relations of Grasim Industries. Thank you, and over to you, Ankit sir.

Thank you, Nirav. Good evening, and thank you for joining Grasim's First Quarter Financial Year 2026 Earnings Call. The financial statements, press release and presentation are already uploaded on the website of Stock Exchanges and our website for your reference. For safe harbor, kindly refer to cautionary statement highlighted in the last slide of our presentation. We have with us our management team on this call to discuss our results and business performance. We have with us Mr. Himanshu Kapania, Managing Director; Mr. Pavan Jain, Chief Financial Officer; and Mr. Hemant Kadel, Incoming Chief Financial Officer of Grasim Industries. From businesses, we have with us Mr. Jayant Dhobley, Business Head; CFI business; Mr. Rakshit Hargave, CEO of Birla Opus, our Paints Division; and Mr. Sandeep Komaravelly, CEO, Birla Pivot, our B2B e-commerce business; and Mr. ManMohan from Cellulosic Fibres business. Let me now hand over the call to Mr. Himanshu Kapania for his opening remarks. Over to you, sir.

Good evening from India to all the participants across the globe, and thank you for joining the call. Over the past 1 year, the global economic landscape has evolved rapidly, shaped by shifting global trade dynamics and policy responses. Let me highlight key developments across global growth, tariff policies and contrasting paths of advanced and developing economies. Firstly, on global growth. In the past year, the global economy has shown moderate but uneven resilience. Growth has slowed slightly with the global GDP expanding at just under 3%, reflecting the lag effects of tight monetary policy in major economies and geopolitical tensions that have weighed on investment sentiment in which inflation while cooling in most advanced economies remains above Central Bank targets, keeping interest rates elevated. U.S. Federal Reserve and European Central Bank maintained a cautious stance through much of the past year, vary of premature rate cuts. This has led to tighter global financial conditions and subdued credit growth. New supply chain disruption such as Red Sea shipping tensions and sanctions have added fresh layers of uncertainty. Secondly, tariffs and trade policy ships was one of the most notable changes in the past year. The escalation of trade protectionism has reinforced a trend of fragmentation of global trades into regional blocks. Many countries are now actively reshoring critical industries, prioritizing geopolitical alignment over pure cost efficiency. Even within regions, we are seeing trade barriers rise not in form of just tariffs, but also export restrictions on strategic minerals, technology controls and state subsidies linked to domestic production. Thirdly, diverging growth trajectories. The divergence in economic momentum between advanced and developing economies has become more pronounced over the past year. The U.S. economy, despite tight monetary policy, has surprised on the upside with higher consumer spending. Our growth is expected to slow below 2% in year 2025. Europe and Japan in contrast have seen sluggish recoveries with weak industrial output, stagnant wages and fragile business confidence. Meanwhile, the real momentum has shifted to developing Asia. China's GDP growth is projected at around 4.8%, reflecting a continued structural slowdown amid cyclic headwinds, especially in the property and consumer sectors. Export momentum has also weakened due to heightened trade restrictions and new tariffs, especially from the U.S. and EU. India, on the other hand, continues to lead global growth amongst major economies with GDP projected to expand by 6.8%, driven by stable domestic demand, higher infrastructure spending and sustained exports. Inflation, although sticky earlier in the year, has moderated to 4.3% by mid-2025, allowing the RBI to shift gears from tight monetary stand to a more neutral and growth-oriented policy, enacting 3 consecutive rate cuts totaling 100 basis points in the current calendar year. In summary, the past 1 year has underscored a few key themes: moderate global growth with clear divide between advanced economies slowing down and emerging markets accelerating, a series of sweeping trade tariffs, redefinition global trade patterns and supply chain realignments and the ongoing tension between economic integration and national security priorities. As we look ahead, the need for adaptive policy framework, regional partnerships and investment in sustainable, inclusive growth model has never been more urgent. Grasim continues to harness the strength of its diversified business portfolio, seamlessly aligning with India's robust growth trajectory. Backed by legacy of building large-scale future-ready businesses, Grasim is well positioned to cater to the rising demands of a dynamic Indian economy. Riding this growth wave, we are proud to share that Grasim has delivered 20 consecutive quarters of year-on-year revenue growth, achieving an impressive 15% CAGR since financial year 2021. Our trailing 12-month TTM consolidated revenue has crossed a record high of nearly INR 1,500 crores, a testimony to our consistent performance and resilience. While the company's CFO, Mr. Pavan Jain would be covering key financial highlights, happy to share that we have started the current financial year on a high note, reporting 16% Y-o-Y growth in consolidated revenue at INR 40,118 crores. The stand-alone revenue for the quarter touched a record high of INR 9,223 crores, up 34% Y-on-Y, led by high growth from new businesses, Paints and B2B e-commerce, coupled with stable core businesses, Cellulose Fibers and Chemicals. Consolidated EBITDA stood at INR 6,430 crores, marking a strong growth of 36% Y-o-Y, mainly due to higher profitability in Cement and Chemicals businesses, partially offset by initial investments for building strong consumer-facing Paint business, Birla Opus, in line with Board-approved business plans. Starting with the new businesses firstly, with Paints business. Birla Opus reported double-digit revenue growth on a quarter-on-quarter basis. As per internal estimates, the organized decorative paints industry has grown by over 5% on Y-on-Y basis. However, as per our estimates, excluding Birla Opus revenues, the organized decorative paints industry has degrown slightly or remained flattish on a year-on-year basis. Our belief is that this subdued growth rate is led by push from incumbent industry players for low-end economy products. Nevertheless, Birla Opus continue to believe that the industry market share realignment along capacity lines, consolidation of fringe players, highest-ever manufacturing capacity addition and increased brand salience will enable the decorative paints industry to return to double-digit growth. The industry is bound to capture the opportunities from rising consumer aspirations and exponential development in infrastructure, especially the housing sector. As per internal estimates, Birla Opus on its own is India's #3 decorative brand. And when combining the revenues of Birla Opus and Birla White putty business, similar to the revenue reporting of all paint majors Aditya Birla Group's presence in decorative paints business has crossed 10% revenue market share. On manufacturing front, the trial production of emulsions and water-based paints at Birla Opus' sixth plant in Kharagpur has begun, and commercial launch is on track by end of quarter 2 FY '26. To emphasize, post the launch of the sixth plant, the Birla Opus' installed capacity will rise to 1,332 million liters per annum, estimated to reach 24% of India's organized paint industry capacity. On consumer engagement front, Birla Opus painting services offered under PaintCraft brand name is being scaled up through retail network. PaintCraft has been running a direct painting services by the company in select cities for the last 2 years, which has now been extensively expanded to over top 100 towns in quarter 2 FY '26 through company's dealer-operated franchises. PaintCraft is a differentiated service offering that is unlike any existing dealer-led painting services model. The key points that makes it distinct is that the service has been built on digital platform, which integrates the service for all stakeholders, including company, dealer franchise, applicator, painter and consumer. This allows PaintCraft to offer, a, transparent consumer pricing; b, financing on painting; c, end-to-end company oversight of dealer-led painting services through trained execution network; and d, a fully taxed compliant service. The company remains committed to upgrade consumer painting experience not only in metros and large towns, but also in mid- and small towns through Birla Opus PaintCraft services with a vision to offer consistent quality and affordable painting services with the backing of the company. Separately, our research shows that consumer love for Birla Opus continues to rise as brand maintains its unique 360-degree integrated, highly salient advertising campaigns. Recently, company has launched Part 2 of Duniya Ko Rang Do, bringing back an adorable Opus boy in animation form. Opus' increased acceptance can be measured through higher uptake of premium and luxury paint products. This quarter, the premium and luxury product revenue contribution was maintained at 65% of revenue covering all categories across emulsion, enamel, wood finish and waterproofing, including retail and institutional segments. On distribution front, the focus shifted to improving dealer throughput in terms of revenue by increasing penetration of each category with the onboarded dealers and selling wider range of SKUs per category. The brand has expanded its pan-India reach to over 8,000 towns in a short span of less than 12 months. The total CapEx spend for Paints business stood at INR 9,555 crores as on 30th June 2025. Grasim is proud of Birla Opus team to have executed such large-scale greenfield project of 6 state-of-art plants. Such execution of simultaneous commencement without any cost overrun, lighting pace production scale-up and delivering first-time right and consistent quality for the entire range of 179 products is a feet unparalleled. This execution further demonstrates financial discipline and manufacturing and supply chain prowess capability of this new start-up organization. Moving on to the second new business Birla Pivot, the B2B e-commerce business. Let me start with the potential of online platform in the building and construction space. Indian B2B market presence, an untapped opportunity, estimated at $2 trillion today and poised to grow at a ferocious pace of $4 trillion by 2030, making it one of the largest globally. There are over 73 million SMEs, growing at 13% annually who are rapidly adopting digital solutions for core business processes like GST compliance, e-way bills, digital payments and credit access. Since its launch in 2023 Birla Pivot has evolved into a comprehensive and trusted B2B e-commerce platform, offering integrated procurement and financial solutions that help businesses grow and become more efficient. Birla Pivot platform today offers a wide range of products across 35 categories, 40,000-plus SKUs from 300-plus brands. Birla Pivot team has been successfully building a large network of buyers and sellers and continuously improving its proposition across 3 core pillars of B2B e-commerce, that is: price, assortment and experience. There has been a steady rise in customers' engagement on its proprietary tech stack, Birla Pivot suit, which is unique and solves the need of the ecosystem. The private labels across tiles, bathware and ply has been gaining traction, and we are seeing increasing inquiries for these categories. As far as this quarter performance, the business has delivered another quarter of superior growth rates despite monsoon-led weakness, which impacted large part of the construction materials segment. The business has grown at high single digit sequentially, led by new customer additions and healthy repeat orders. The business annualized revenue run rate continues to rise and remains on track to achieve INR 8,500 crore, that is the $1 billion ambition by FY '27. Moving on to the Cement business. The third revenue stream in Grasim's building materials segment, UltraTech. The performance has been robust with revenue growth of 13% Y-o-Y. The company added new capacity of 37.4 million tonnes per annum on a Y-on-Y basis with a total capacity domestic and overseas now at 192.3 million tonnes per annum. The large annual capacity addition includes greenfield expansion and acquisition of key assets of Kesoram and India Cement Limited business domestically and RAK at UAE during last 1 year. UltraTech continues to stand at the helm of India's infrastructure growth story and contribute to the nation's long-term development goals. The volume growth in the same industry is estimated at 4% to 5%, and UltraTech continues to outpace industry growth with volume growth of 10% year-on-year. The operating EBITDA per metric ton grew at a healthy level of INR 1,248 per metric ton, a phenomenal rise of 37% on a Y-o-Y basis, led by scale benefits and cost optimization. As regards existing core businesses, including Cellulose Fibers, Chemicals, Renewables and Other businesses and overview of company financials, I'm now handing over to the CFO, Mr. Pavan, to carry on from here.

Thank you, Mr. Kapania, and good evening to everyone. Cellulosic Fibre prices continue to remain resilient compared to other competing fibers like cotton and polyester, which are exhibiting volatility with a downward bias. In H1 of calendar year 2025, there was demand slowdown globally, including demand in China, resulting into decline in utilization levels to 82% and increasing inventory to 20 days. With price increase to partially absorb the high input costs, Cellulosic Fibre revenue grew by 7% Y-o-Y to INR 4,043 crore. Just to remind, this segment also has an element of our Cellulosic Fashion Yarn business where the volumes grew by 6% Y-o-Y. The realizations in Cellulosic Fashion Yarn business continue to remain impacted by lower-priced imports from China. High input prices, including that of caustic soda, reflected in higher profitability of our Chemical segment, partially absorbed by the company has resulted into decline in EBITDA by 17% Y-o-Y. In Chemical business, revenue grew by 16% Y-o-Y at INR 2,391 crore, led by volume growth of 8%, driven by stable domestic demand scenario. ECU realizations stood flattish on a sequential basis and higher by 10% Y-o-Y, led by stable demand and favorable base. Specialty Chemicals sales volume stood at record high levels, recording a growth of 6% Y-o-Y as the utilization rates of expanded capacities are improving. EBITDA for the Chemical business grew by 36% Y-o-Y at INR 422 crore. The Financial Services business under Aditya Birla Capital is continuing to focus on embracing customer centricity and driving synergies across verticals. The key thrust has been on strengthening capabilities in data, digital and technology, enabling enhanced decision-making, improved customer experience and greater operational efficiency. For Q1 FY '26, the business reported revenue growth of 8% Y-o-Y, led by housing finance, which was up by 65% Y-o-Y and health insurance, which was up by 31% Y-o-Y. Total lending portfolio, which includes NBFC and housing finance loan book grew by 30% Y-o-Y to over INR 165,000 crore. Amidst declining interest rate movement, the NBFC business witnessed a Y-o-Y decline of 59 basis points in the net interest margin. The total assets under management across AMC, life and health insurance grew by 20% Y-o-Y to over INR 553,000 crore. Of this, life insurance AUM crossed a milestone of INR 1 lakh crore. In Renewable business, our total installed peak capacity reached 1.9 gigawatt in Q1 FY '26, up twofold from 946 megawatts in June '24. The business has strong anchor clientele with Aditya Birla Group companies, representing 43% of the existing portfolio. On CapEx front, Grasim has announced CapEx plan of spending INR 2,263 crores in FY '26, out of which INR 480 crore has already been spent in Q1 FY '26. Lyocell project in Cellulosic Fibre business remains on track to be completed by mid-'27. The long lead items orders have been placed and other orders and contracts are in process. In Chemicals, mechanical completion of 2 projects namely ECH and CPVC plant with Lubrizol would be completed in Q3 FY '26. Before we open the floor for Q&A, I would like to share development on my movement. As you would be aware, I'm superannuating effective 15th August '25. And my colleague, Hemant Kadel, will be taking over as CFO. It is a mixed feeling of pride, gratitude and emotion being associated with Grasim for more than 20 years and CFO for over 3 years. It has been a journey of growth, challenge, learning, contribution and most importantly, collaboration. I've been fortunate to work and interact with some of the brightest minds and committed individuals. Together, we have navigated market cycles, celebrated milestones, weather uncertainties and above all of healthy values that defines this company. As I step away, I carry with me not just numbers and reports, but memories, relationship and the satisfaction of having contributed in some way to this institution's journey. I would like to add my interaction with many of you as analysts, investors and officers has helped to shape my knowledge and intellect. I want to thank the Board and our leadership team for their constant support and belief in me to each one of you on this call and friends in the investment world. Thank you for the trust, work relations and shared purpose we have built over the years. Thank you for building such an important association. It has been an honor. And I'm confident that the company is in an exciting growth phase poised for even greater heights. I look forward to watching Grasim's continued success this time from the sidelines. I now open the floor for Q&A.

[Operator Instructions] The first question is from the line of Mihir Shah from Nomura.

So first question is on paints. I wanted to check on your sales momentum in the recent months. My back of the calculation suggests that you've grown about 20% in this quarter on a Q-o-Q basis. But just in the recent months, I wanted to check the momentum. The context of the question is generally brands in the initial phase of the launch, see high demand and then it moderates down in some time as it consolidates before starting again to gain traction, if at all. There are views that Opus is now consolidating and dealers are going back to their old brands. I wanted to know your side of the narrative. And which phase are you in currently? So that's my first question.

So thank you, Mihir. Let me answer the first question. So like we've also declared quarter-on-quarter growth is in double digits. And the fact is that growth for us continues. We have growth, which is coming...

Sir, sorry to interrupt you. Mute your line from your side when you're not talking, please? Sir, go ahead.

Yes. So growth for us continues. So growth, as you said, comes also from dealers who are being added, but more from dealers who are now giving us more business as counter share. On your query that there is feedback that there is dealer attrition and dealers are going back, I am not able to comprehend that easily because firstly, let me tell you that apart from the franchisees that we have, majority of our dealers are multi-brand dealers. We are not the first brand in the shop. We are either the second, third or fourth brand. And most of those dealers continue to be with us and continue to expand our portfolio and sell us more. If 1 or 2 dealers have gone back, that should not be taken in the other calls where we have heard that we are having dealer attrition. The fact is the larger universe and majority of them continue to grow with us and giving us more competition. On your question, where are we on the phase? We are purely on the growth phase. So while you might say classically, there is a growth phase and there is a consolidation phase, we are growing and consolidating both because when we say that our throughput per dealer is going up as a function of deeper penetration, more products and more range, that obviously means consolidation. But the fact that we are still adding some more dealers and increasing our range in each dealer says that we are also growing. So that's where we are.

Got it, Rakshit. That's quite helpful. Secondly, I wanted to know if you can share how is your traction between the category A, B, C dealers? Where have you seen the most acceptance? And what kind of hurdles are you facing to make inroads in the other ones that you have not been able to get through? And a subpart to it is, earlier, even you had highlighted during the launch that you will cross 6,000 towns, I see you've crossed already 8,000 towns now. Even your SKU and product mix has crossed the earlier number that you had shared during the launch. Any updated dealer reach or any other updated numbers that you would like to share? That's my second question.

So like we said, we have shared the dealer reach, as we said, that we had a target of 50,000 dealers in the first year, and we were very close to that. And like we said, we are still adding dealers, but consolidating more on existing dealers. You rightly said we had talked about 6,000 towns, but we are close to 8,000 towns. So for us, growth continues in this way. We are not sharing any other numbers. But I think these are fair indicators that business is progressing on all fronts in all the geographies.

[Operator Instructions] The next question is from the line of Rahul Gupta from Morgan Stanley.

Two questions. So first, just continuing on the previous question. Can you help us understand how competitive landscape has evolved versus last quarter? I remember you mentioned that the economy segment had relatively higher competitive intensity. So just some color on this will be very helpful. That's my first question.

Yes. So like we said, the competitive intensity remains. And we see that from competition side, the intensity has been increased on the value or the economy segment. The level of discounting has gone up. And you can also see from all the other companies that while volume growth is there, but the value growth is much lesser than that. So obviously, the action on discounts on the economy segment has been taken up by competition. But like we said, we continue to play very strongly in all the 3 segments, as you say, luxury, premium and economy. Himanshu also ratified in his opening speech that the contribution of luxury products, if you assume the full portfolio for us, it's close to 65%, which is very, very good, even for an established player, leave aside a new player like Birla Opus.

Got it. So just a follow-up on this. So how should we look at both volume and value for rest of this year? I also understand that festive season is earlier this year. So any color that you may provide on this?

So if you noted on a Q-o-Q annual basis, the market has grown only at 5%. And if you remove Birla Opus, then the market is actually minus 1 or 0. So obviously, Birla Opus has taken a lion's share of the growth, which has happened on an annualized basis. Now if you take a look at this year, yes, the market is a little slow. The advancement of rains does not work well for Paints business because the exterior business gets affected. And this time, a monsoon, even if at a lower intensity continues for a longer period, which would mean that the slowness because of the monsoon would still be there. Now how would the volume growth move ahead in the following quarters? Difficult to predict. But yes, you are right that this time, Diwali is earlier and corresponding to that, the so-called high sales season period, which has relevance in paints will come before. And that should start happening towards the end of August or September. And as Birla Opus, we are fully prepared to tackle that successfully, and we see that we should be able to grow well on a continuum basis. As far as competition is concerned, it is for them how do they want to play the coming season.

Great. Just one bookkeeping question. Our math suggests that your reported revenues was around INR 11 billion versus INR 9 billion last quarter. Can you help us understand what kind of revenues was in CWIP?

So we appreciate your -- doing your math on your books. But like we said, we will disclose the math at the right moment as Pavan had promised in the last call also.

So let me flip this question. Is CWIP revenues this quarter materially different versus last quarter?

See, what is CWIP for factories which have not been capitalized and which are manufacturing as per accounting laws, the sale from that has to be put in CWIP. So yes, there is our factory Mahad, which was manufacturing. It had products, which were manufactured before capitalization. So they would go in CWIP. I would not like to comment on the value. But the fact is as per accounting standards on a time scale, it does impact our reported numbers.

Next question is from the line of Nirav from Anvil Wealth.

Two questions on Chemicals. Sir, one, when we see our Y-o-Y numbers for Chemicals, our EBITDA has gone up by close to around INR 12 crores. And based on the ECU realizations, we are higher by around INR 3.40. So which translates to a benefit of close to around INR 103 crores. So just wanted to check here, like the benefit from ECU as well as from the renewable share was higher than this INR 103 crores, and there was a degrowth in the profits from the epoxy division. Your thoughts here.

Yes. So I'm not completely sure I understand your math, but the end question that you have is was there a degrowth in epoxy profits, right? That is the question you are leading to. So I will answer it very directly instead of indirectly. So as you know, feedstocks for epoxy basically BPA, ECH have been hardening, particularly ECH. You also know that there is an antidumping duty on ECH. At the same time, you also know that epoxy comes into India through different countries, particularly Korea through FTA arrangements, right, which basically puts pressure on the epoxy chain. Our approach has been to find the right balance between maintaining market share and maintaining margins. We do hope that the process that is now running with the government to review different FTAs and the industry representations around that will lead to some positive. So yes, within the epoxy chain, the industry is in a margin compression between hardening raw material prices, antidumping duty on one hand and duty-free imports on the other hand. And we are making the right balanced trade-offs between retaining our margin and ensuring that we don't spoil our market position.

Correct. Sir, in one of the interactions in the earlier calls, you mentioned that the steady state or the normalized margin for the epoxy business should be anywhere between 15% to 18%. But I think with all the factors what you mentioned above, the margins in this business possibly would have come closer to 10% or, let's say, anywhere between those bands. So is it a correct...

I would not like to comment on that because you know that we also have a large portfolio of specialty epoxies. We make a large number of products uniquely tailored for automotive, for wind, for anticorrosion, et cetera. So I would not like to comment on the current state of margins because it will -- it's competitively sensitive.

Correct. Sir, second question is on the power requirement. I think based on some back-ended calculations, our power requirement...

Nirav, sorry to interrupt you. Can you speak a little louder, please?

Yes. Am I audible now?

Yes, audible.

Yes. So sir, based on the calculations, I think our power requirement for the Chemical business is close to around 350 megawatts. So if you can just help us understand what is the mix between captive renewables and grid? And also, if you can share the capacity utilization for the Chlorine Derivative business?

The capacity utilization has been slightly above 80% for Chlorine Derivatives, if that is the one that you're asking...

No, no, sir, I'm specifically asking about VAP.

That is a difficult number to give because it's a very complex portfolio with more than 20 product lines. So that's a difficult one to do. Maybe I don't Want to disclose that number, yes.

No worries. And sir, the breakup of 350-megawatt or whatever may be the expected number?

I'll give it you in 2 minutes.

Next question is from the line of Prateek Kumar from Jefferies.

Wait. Can you wait please? Just giving the power breakup...

Sorry, sir?

Answer to Nirav's query, no?

Yes. Renewable has reached about 15% exit.

15, 1-5, 15?

Yes, which is, I think, the number that you were looking for.

Correct. And what would be a captive mix?

Captive and grid would be roughly equal.

Prateek Kumar from Jefferies.

My first question is on your B2B e-commerce segment. The segment has scaled to almost INR 5,000 -- over INR 5,000 crore of revenue run rate. What is the kind of profitability this segment is doing? And -- or any outlook if you can share on the same? Also, this segment was -- I mean envisaged to do like around INR 2,000 crore of CapEx when this segment was launched. How is the -- I mean, how do we see CapEx in the segment now and -- that is my first.

Prateek, thanks for the question. This is Sandeep here. So on your first question, the revenue growth has been pretty good and it continues quarter-on-quarter. As was remarked in the opening comments, we are seeing high single-digit growth sequentially when you compare quarter 4 to quarter 1. You'd asked about profitability. We had earlier mentioned it in our previous quarter calls as well at a scale of $1 billion, which is what we are estimating that we hit in FY '27, we are confident that we'll break even at that scale. And all our indications and our trends right now are pointing towards that, if not sooner. On your second question, Prateek, which is on CapEx and how much have we spent out of the INR 2,000 crores that was announced when we launched the business? Look, our business is a technology business. We are fundamentally investing in building a technology platform and making sure that all the parts of our value chain are visible to our buyers, our sellers and everyone else who is participating in the ecosystem. So most of our CapEx so far has largely been in building that technology stack. But yes, without going into the details of how much has been spent, we are well within track as per what we had budgeted for. And we still remain in that growth phase, and we still continue to invest in building the right technology, which will solve for the needs of this B2B universe.

My other question is on Paint business. Any 1-year target -- or we had a great start to the financial year. Any 1-year target we now have for this business in terms of revenue or any other metrics that you think is important?

So like we talked about -- we gave some metrics for the first year, and then we have anyway given our intention to be what we want to be in a full-scale operation after 3 years. So we don't really have specific targets to share with you for a 1-year period, but the journey continues, and we are on track, give or take a few things here, plus or minus. So that's how we want to put it.

Next question is from the line of Nishant from Temasek Holdings.

Just one question on the Paints business. What is the credit policy difference that we have versus peers, i.e., do you have a higher indexation to dealers or more credit funded versus a short-cycle credit?

So if you take a look at the overall market and if you take a look at the top 3 or 4 players, our credit policy will fall somewhere in the center. So we are with the market. It's not that we are giving it less or more. But the different players have slightly different policies starting from A to B. So our policy would fall somewhere in the average in terms of credit days which we mentioned.

I understand. And second one is in terms of just the -- as you go through the brand evolution, how do you track evolution from a transactional business pull-through to a brand-driven business pull-through? What -- how would you sort of assess that evolution?

So we have taken some initiatives. One of them is also first time in the paint industry is that we have availability of RMS data, which actually gives us a lot of insight into what is the share that we have across different geographies. Secondly, we also have a good brand tracking mechanism, which shows where are we in terms of total awareness, unaided awareness, spontaneous awareness and how are we progressing versus competition on a quarter-to-quarter. Very soon, we will also get into what you call is the consumption funnel and reason from awareness to usage and via the dropout. So like a classical good consumer brand, we are putting these practices into play and access to this kind of data helps us understand how we are moving better.

Understand. And any color that you can share on current sort of awareness data that you may be able to share today?

Yes. So I'll share with you. If you take a look at total awareness, we are already there with the top 3 brands. And if you talk about spontaneous awareness, as per my data, I am already #2 and equal to the #2 player.

Understand. Okay. Sorry, spontaneous is unaided awareness is how you...

Spontaneous is you ask someone which is the one brand that you would want to see.

Next question is from the line of Amit Purohit from Elara Capital.

Just one on the overall industry demand. You clearly highlighted that the incumbents have not grown much. And how do you see this going forward as we enter into festive season? Any outlook that you think would find it challenging for us to maintain the growth momentum because the industry demand remains muted? That was my first question. Second is on PaintCraft. I just wanted to know this service would be available to all our dealers. And normally in a typical dealer, what is the share of painting service? I know not for all dealers, it may be, but at least the top dealers that we -- in their sales, how do we think about it, this as an enabler to drive further growth?

So let me answer the first question regarding how do we see the demand in the upcoming season. So you see the season is slightly advanced this time as compared to the last few years. So you should see the festive upswing starting towards the end of this month and September should be a big month. Difficult to say how the other players will play out because currently, the focus is a lot more on economy segment and discounting, and that is going to get you some volume, but that might not get you so much of value. As far as we are concerned, we will play the market as it should be. We have a very exciting luxury premium portfolio also. We would focus on that. We are quite confident that we will be able to reap good benefits and continue our quarter-to-quarter growth. For the others, I think it's up to them as to how they want to focus on themselves and play. On PaintCraft, see, we were offering PaintCraft as a direct service as a kind of test market in some cities through service partners. We are now going to take it broader. And in the first phase, we will take it to about 100 towns, and we are going to offer it through our franchise dealers. But obviously, during a certain period of time, we will cover a large number of dealers who work with us. Now how much contribution does come from printing service? We will have to learn that ourselves. As Himanshu said, we have created a good tech stack in terms of lead generation, in terms of fulfillment, transparent pricing, tax compliant and we will also promote it that way. We are quite confident that the consumer will be excited because there will be many benefits here. And we hope that it contributes a decent volume for other partners who are working with us. But we will have to see how it evolves, but good preparations and good plans have gone into that.

The next question is from the line of Raashi from Citi.

Just 2 questions. On the paint side, I think I missed the point that you mentioned that excluding Birla Opus, you said that the industry growth was flat. Is that what you said?

This year, if you take Q1 of FY '25, and if I remove Birla Opus from both left-hand and right-hand side, the market growth is marginally negative.

And with Birla?

With Birla, we said it's about over 5%.

Understand. And what is your general estimate for the industry growth for the -- I mean, I understand that a seasonally strong period is coming up. But On average for the year, how are you thinking about this?

I think too early. It's just been 1 quarter. There are 3 more quarters left. We will have just to wait and see. We will play a good game.

Raashi, I think you're the fourth same question asking. Let me address. This is Himanshu, I'll just address it. It's dependent on the industry players. There is volume in the market. Now whether you want to convert that volume into value is now left to the industry players. That is to us is what we are repeatedly saying. There's enough in the market. The market has huge opportunities. Consumers want to do painting services. They can take it and discount it and still get volume and not get value or they can keep the value with them. That is where the current industry is. So that's why we are waiting.

Understand. And any update on the whole CCI investigation?

Yes. I would like to share CCI's actual permits. Grasim as filed information with CCI regarding the practices form in the market with respect to abuse of dominance by the dominant player. CCI saw merit in information and evidence shared by Grasim helped and has ordered DG for investigation on 1st July 2025. The order is available for public on the website of CCI. We have to wait to see the results of the investigation. As this is a matter subjudice and with the regulator, we will not be able to comment anything further on the investigation.

Okay. Understood. And just last question for me. You mentioned that the B2B business will breakeven in FY '28. Is that what you said?

This is Pavan. When we reached this $1 billion revenue top line, Raashi, we said we will be EBITDA positive.

Next question is from the line of Shreya from Oaklane Capital.

My question is related to the Chemicals business. So I wanted to know, you have mentioned.

Shreya, sorry to interrupt you. You're sounding a little distant. Can you please speak a little louder and closer to the mic?

Yes. Am I audible now?

Yes.

Yes, it is better now.

So my question was related to our Chemicals business. So you mentioned that the chlorine integration level for the quarter was 63%. So could you give some sense or color on what portion of it goes to the dedicated customers and what was for the internal consumption?

The breakup of the chlorine sales. I think internal consumption, I will give you a range because I don't want to give you an exact number. You can...

Yes. Any sense directionally could help.

About 40% internal business.

Sorry, your voice was muffled.

So about 30% to 40%, it is a range which we are giving will be in the internal consumption. Rest goes to the pipeline customers.

Okay. Understood. And any sense on -- since we will be having our ECH plant, and as you mentioned earlier that because of the ECH prices going higher, the epoxy margins were compressed. So as and when we have our ECH plant, where do you see our epoxy margins going forward?

Yes. Wouldn't that also not depend on the ECH price at that moment in time in that quarter? As you know, ECH is a volatile commodity. We would have to make an assumption on either propylene or gasoline or whatever. So that's a difficult one to predict. Of course, our profitability with it, right?

Next question is from the line of Aniruddha Joshi from ICICI Securities.

Sir, I guess, on Paints, you indicated premium -- revenue share of premium paints is [Technical Difficulty]. If that's a correct number or...

Aniruddha, sorry your voice is breaking.

So it's not revenue share. Revenue contribution to the total contribution of premium plus luxury is 65%.

Okay. Understood, sir. And this premium paint is calculated means any price and above like INR 200 per liter or INR 250 per liter, means, how is the -- how do you define that?

Market defined premium and luxury products. In waterproofing segment, in wood finish segment, in emulsion segment and enamel segment. And the same is a definition. It varies from each category-wise. It's very well defined. We have a brand. We have 3 broad brands. Style is a brand for economy. Calista is a brand for premium and One is a brand for luxury. So primarily, when I combine Calista plus One, wherever applicable, otherwise, whatever is market defined in a particular category. It's very well defined.

Okay. Sure, sir. And additional details means what would be the geography-wise revenue breakup, if you can indicatively share East, West, North, South? Even if you share in FY '25, that's enough.

So we've also told in the past that we are generally performing well across pan-India. And we also said that the range between maybe my best-performing region and my so-called slower performing region is also in 80 to 120. So that continues. So by and large, we have good acceptance. And like we said, we are growing and consolidating across all markets. This is also changing a bit dynamically. And our aspiration is pan-India, not regional aspiration. So we want to grow and lead in every market. So some other businesses of other competitors who have focused on particular states or have very disproportionate revenue from few states, we want to be all India, all-rounder where we are doing well across all geographies.

Okay. Sure, sir, last question. Sir, we keep hearing from channel checks that the 10% extra grammage scheme is withdrawn in some markets. So is that understanding correct? Or it's incorrect?

So I'm very happy that you raised this because if you were not going to raise, I would have anyway given a clarification. We've also heard from other analyst calls that people know more about our business than us ourselves. So let me put this record on straight that the 10% offer on 20 liters and 10 liters for majority of emulsion packs that we are giving fully continues, okay? So this puts the record straight.

Next question is from the line of Sucrit Patil from Eyesight Fintrade.

My question is specifically to Mr. Himanshu. Is Mr. Himanshu online?

Yes, yes. Go ahead, Mr. Patil.

Yes, sir. This is Sucrit Patil. I had a forward-looking question on your emerging platform. With Birla Opus entering the decorative paints segment and Birla Pivot scaling in the B2B e-commerce, how is Grasim thinking about cross-platform data monetization, predictive data -- predictive demand mapping or AI-led SKU optimization across these verticals in the next 2 to 3 years? And in your view, could this create a differentiated ecosystem advantage versus stand-alone peers? Yes, sir, please give your view on this.

So to be able to -- if I was in an environment, we did not have a privacy applicable to me, I would have given a very different answer. But today, the privacy laws of the country are very, very strong. And doing cross sales from different platforms, in my mind, is not permitted. I am currently the Chairman of the FICCI Privacy Board. And clearly, that's not permitted. We'll have to go back to the customer to do cross sales of -- which is of a customer available one platform to the other platform. And that itself is a [indiscernible] task. Both the new businesses are in the process of getting their act together, and we are not going to cross this bridge for a certain period of time. So that's our current position.

Sir, the line for the participant dropped. The next question is from the line of [ Sakshi ], individual investor.

So my question is regarding Chemical business. How much is the Chlorine price for this quarter?

For the quarter that we just reported, Chlorine was trading at about INR 6,000, INR 6,500 negative.

So sir, while calculating ECU, are we considering flakes and hydrogen realization?

So everything that relates to the actual electrolysis process is considered in the ECU realization. That's the industry standard.

Actually, like if you see some industries are like while calculating ECU, they are considering flakes and some are like both flakes and hydrogen. So what we are following in Grasim?

So ECU stands for electrochemical unit. So every realization I get related to my electrochemical unit is in my ECU realization. So I can only tell you what my definition is.

Okay. Okay. Okay. Got you. And sir, second thing for extension plan, we have quoted like ECU, which is 50, and 50 ECH, 50 KTPA. However, in Chlorine Derivatives, we are telling 79 KTPA plan for expansion. So may I know like what's the difference between 179? Is it like partly already commissioned or what exactly it is?

We -- as you know, the market conditions are a little bit uncertain right now. So certain projects, we -- on Chlorine Derivatives, we have deferred for better market conditions. So that's the difference between what we indicated last quarter and this quarter. But those are smaller Chlorine Derivatives. The 2 main ones are ECH and CPVC, and those are proceeding as planned. The rest we may accelerate or delay based on the market conditions are.

Okay. Okay. And what is the plan for expansion of cost of 25 KTPA? Is it same as quarter 3 financial year '26 or what exactly it is?

That is again market timing dependent. It's a very small expansion. So when we believe the conditions are favorable, we will execute that.

Okay. As we now, sir, like Adani and Reliance is coming into picture, what we are thinking like it will impact our domestic market or...

So we have been getting this question a couple of times, right? And look, the domestic [Technical Difficulty] for sure. And their project is related to PVC. There is a lot of changes also that happened in the global caustic scenario. So if PVC demand adds in one area, it subtracts from another area. So it's a somewhat complicated question to answer it. The Indian market is not insulated from the global market, either on PVC or on caustic. So just looking at the picture from an India perspective only may not give us the full answer. We look at the total PVC production capacity in Asia, right? And then you then put that in context of whatever Indian capacity is coming in.

Thank you very much. Ladies and gentlemen, due to time constraints, we will take that as our last question. I now hand -- with this, we conclude today's conference call. On behalf of Grasim Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Thank you, everyone. Thank you.