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Informist, Friday, Feb. 6, 2026

 

By Narayana Krishna

 

HYDERABAD - Grasim Industries Ltd. is likely to report a net loss for the December quarter due to continued losses in its paints and building materials businesses. Higher depreciation and interest costs are also expected to weigh on the bottom line for the quarter, according to analysts.

 

However, the operating performance of the company's core chemicals business is seen improving, supported by steady growth in its viscose staple fibre and other chemicals segments, which is expected to help narrow the losses from a year ago.

 

The Aditya Birla group company is expected to report a net loss of INR 1.3 billion for the December quarter, compared with a net loss of INR 1.7 billion a year ago, according to the average of estimates from five brokerages. The company's revenue is expected to rise 22% on year to INR 98.8 billion. On a trailing basis, revenue is expected to rise nearly 3%. Grasim Industries will announce its December quarter results Tuesday.

 

The highest estimate of the company's net loss is INR 1.4 billion by ICICI Securities Ltd. and the lowest is INR 1.2 billion by Nuvama Wealth Management Ltd. The highest estimate for revenue is INR 101.3 billion by Kotak Securities Ltd. and the lowest is INR 97.4 billion by Motilal Oswal Financial Services Ltd. 

 

Grasim's core viscose staple fibre is expected to drive its revenue growth in the December quarter, supported by higher volumes and improved realisation, analysts said.

 

Motilal Oswal estimates the company's standalone revenue will rise about 20% on year, with fibre business volumes increasing around 1% and realisations improving nearly 6%. The brokerage expects chemical volumes to grow by 2% and realisation to rise by 5%. Kotak Securities expects fibre business volumes to increase 4% on quarter, alongside a marginal improvement in realisation. The chemicals segment volumes and margin are seen flat on quarter.

 

Continued losses in the new businesses - primarily paints operating under the Birla Opus brand and building materials operating under the Birla Pivot brand – are expected to offset gains from the core business.

 

ICICI Securities estimates revenues from the paints and business-to-business building materials businesses to rise about 10% on quarter, but expects total losses to remain largely flat. Motilal Oswal expects revenue from Birla Opus Paints to jump about 71% on year, even as the segment continues to report losses. Losses from the new business segments will continue to pressure overall margins, keeping profitability under strain despite improvement in the fibre and chemicals segments, Nuvama said.

 

Brokerages expect Grasim's earnings before interest, tax, depreciation, and amortisation from the fibre business and chemicals segments to improve. Kotak estimates the fibre business EBITDA at INR 4.1 billion, up 23% on year and 16% on quarter, driven by stronger volumes and margin, while the chemicals EBITDA may reach INR 3.7 billion, up 11.4% on year. Grasim's December quarter EBITDA is projected at INR 4.1 billion, according to the average of four estimates.

 

Brokerages expect the company's December quarter EBITDA margin to remain modest but improve on year, supported by better performance in the fibre and chemical segments, even as losses in new segments cap the upside. Kotak Institutional Equities pegs the company's standalone EBITDA margin at 4.2%, up 86 basis points on year but down 38 basis points sequentially, while Motilal Oswal estimates the margin at 4.0%, up 70 basis points on year from a low base. ICICI Securities and Nuvama also see the EBITDA margin around 4.1% and note that gains from core businesses will be partly offset by continued losses in paints and building materials, which will keep overall margins under pressure.

 

Increased competition in the paints business and the outlook for cement prices are key issues that analysts will watch. 

 

Of the three research reports on the company available with Informist, two have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 3,452. This is nearly 22% higher than the current market price. One brokerage has a 'hold' recommendation on the stock with a target price of INR 3,198. 

 

The stock has fallen nearly 2% since the announcement of its September quarter earnings. On Friday, the company shares ended at INR 2836.90 on the National Stock Exchange, down 0.9% from its previous close.

 

The Following are the Oct-Dec earnings estimates for Grasim Industries Ltd. from five brokerage firms in descending order by the estimate of net profit in INR billion:

 

Brokerage name	Net Sales	Net Profit	EBITDA
Nuvama Wealth Management Ltd	98.10	-1.19	4.02
Mirae Asset Sharekhan Ltd	97.73	-1.23	--
Kotak Securities Ltd	101.34	-1.29	4.25
Motilal Oswal Financial Services Ltd	97.40	-1.30	3.90
ICICI Securities Ltd	99.56	-1.36	4.06
Average	98.83	-1.27	4.06

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

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