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Informist, Friday, May 23, 2025

 

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--Grasim: Paints industry seeing consolidation of players through M&As
--CONTEXT: Grasim management's comments in post-earnings investor concall
--Grasim: Co's new-age Birla Opus paints seen as a challenger
--Grasim: Caustic soda sales volume down YoY amid Karwar plant shutdown
--Grasim: Aspiring for double digit market share in Birla Opus in FY26
--Grasim: Upcoming Kharagpur paints unit to reduce freight, logistics costs
--Grasim: Demand still slow in paints market so far in FY26
--Grasim: See FY26 paints prices same as FY25, rise in discounts unlikely
 

 

By Rajesh Gajra and Afra Abubacker

 

NEW DELHI - Having achieved a high single-digit market share in domestic decorative paints market in 2024-25 (Apr-Mar) for Birla Opus based on internal estimates, Grasim Industries Ltd. aspires for a double-digit market share in FY26, the company's management said Friday in a post-earnings conference call with analysts and investors.

 

Combining sales of paints under the company's Birla Opus brand and white putty under group company UltraTech Cement Ltd., the revenue share of Grasim is already over 10% of the organised paints market, the company had said Thursday.

 

The management, however, refused to guess how the paints demand scenario will play out in FY26 as compared to the subdued demand and intense competition in FY25, but said the demand so far in the current financial year is "still slow." But rise in price discounts by paints companies is unlikely in the current financial year and the pricing level will likely be similar to that of FY25, the management said.

 

The management said the slowdown in the domestic paints industry in FY25 was partly on account of downgrading of products. Product downgrading in any sector happens when premium products are offered at the lower end of the market. The slowdown is not as much in volume as it is in revenue, according to the management of Grasim.

 

"The industry is also undergoing a structural shift with consolidation of players through merger and acquisition and same is expected to reshape the competitive landscape," the management said. Grasim's Birla Opus brand is seen as challenger in the paints industry, according to the management.

                                                          

The company said its pathway to reach double-digit market share is through business expansion. "Post Kharagpur plant launch, Birla Opus capacity share of 24% in the sector will provide us the pathway to travel from existing high single digit revenue market share to penultimate level of capacity share,' management said.

 

The company expects to start trial production from the 6th plant at Kharagpur in Apr-Jun and commercialise it in first half of FY26. "And once Kharagpur comes up, it will give us the logistics cost reduction. So, Kharagpur will reduce the per kilometre per litre travelled by the average user," the management said. A reduction in freight and logistics costs, which the new plant will enable, will help Grasim reduce operational losses in the paints segment.

 

For the March quarter, Grasim reported a net loss of INR 2.88 billion, against INR 4.41 billion loss in March 2024. The revenue from operations jumped 32% on year to INR 89.26 billion. In FY25, Grasim's net profit fell 78% to INR 2.12 billion while its EBITDA declined to INR 28.57 billion from INR 35.73 billion in the previous year. The revenue from operations rose 22% to INR 315.63 billion in FY25.

 

In its chemical business, caustic soda sales volume declined on year due to lower production amid shutdown at Karwar plant and power constraints at Vilayat plant, the company said. Grasim said power availablity is set to improve in Vilayat by Jul-Sep.  End 

 

Edited by Vandana Hingorani

 

 

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