Synopsis:
A large-cap company’s shares are in focus today after announcing Q2 results and brokerage firms have given the Buy ratings.
A large-cap company that primarily produces cellulosic fibres, diversified chemicals, fashion yarns, and fabrics in India and internationally, is in the spotlight today after brokerage firms gave the Buy ratings with an upside of 35 percent.
With a market capitalization of Rs. 1,85,176.29 crore, the shares of Grasim Industries Limited were trading at Rs. 2,720.60, down by 5.60 percent from its previous closing price of Rs. 2,882. The stock has reached an intraday low of Rs. 2,704.20 in today’s trading session.
Analyst Outlook
Morgan Stanley
Morgan Stanley Maintains Overweight rating with a target price of Rs. 3,690 with an Upside of 35.63 percent from current market price. Morgan Stanley citing a strong EBITDA beat driven by both core and new-age businesses. The Paints segment showed accelerated market share gains, and the brokerage expects further ramp-up in H2 amid improving demand. It sees potential for re-rating and sustained medium-term growth, keeping Grasim as a top pick.
Jefferies
Jefferies Maintains Buy rating with a target price of Rs. 3,500 with an Upside of 28.65 percent from current market price. Jefferies noted a slight beat in results. While the Paints segment faced a tough quarter, market share gains continued. The CEO’s resignation is viewed as a negative surprise that could trigger short-term investor caution due to his key role in scaling the business.
Citi
Citi Maintains Buy rating and raises target price to Rs. 3,450 (from Rs. 3,400) with an Upside of 26.81 percent from current market price. Citi highlighted stable earnings with continued Paints market share growth under Birla Opus. However, it notes that the CEO’s exit could create uncertainty about future direction and growth until a successor is announced.
Q2 FY26 Results
Grasim Industries Limited reported Rs. 39,899.58 crore in revenue for the second quarter of FY26, a 16.6 percent increase over the Rs. 34,222.54 crore for the same period in FY25. It decreased by 0.54 percent as compared to Rs. 40,118.08 crore in Q1 FY26.
The company’s EBITDA for Q2 FY26 stood at Rs. 7,671 crore, down by 13.1 percent from Rs. 8,822 crore in Q1 FY26, and rose by 27.3 percent from Rs. 6,026 crore in Q2 FY25.
The consolidated net profit for the second quarter of FY26 was Rs. 1,498.04 crore, which was 45.9 percent lower than the Rs. 2,767.08 crore reported in the previous quarter and increased by 52.4 percent from Rs. 982.94 crore in Q2 FY25. Profit growth was also reflected in earnings per share (EPS), which increased to approximately Rs. 8.16 in Q2 FY26 from Rs. 4.73 in Q2 FY25.
Out of the total revenue of Rs. 39,899.58 crore, the majority came from the Building Material segment, contributing Rs. 22,253.32 crore (55.77 percent), while the Financial Services segment accounted for Rs. 10,569.31 crore (26.49 percent). The cellulosic fibres contributed Rs. 4,149.39 crore (10.4 percent), Rs. 2,398.62 crore (6 percent) was contributed by the chemicals segment and other segments (Textiles, Renewables & Insulators) contributed Rs. 996.44 crore (2.5 percent). The total revenue also includes inter-segment sales of Rs. 467.50 crore (1.17 percent).
Segment-wise Performance
Cellulosic Fibres (CSF & CFY)
In China, operating rates averaged at 89 percent compared to 86 percent in the previous year, while average inventory levels increased to 15 days from 8 days, leading to a moderation in average CSF prices to $1.51 per kg. Domestic prices remained stable due to rupee depreciation. CSF sales volume declined by 5 percent year-on-year to 209 KT owing to temporary logistics challenges at Vilayat, which have since normalized. Specialty fibre sales grew 53 percent year-on-year, supported by higher exports, while CFY volumes increased 3 percent year-on-year driven by festive demand, though realizations were under pressure due to competitive pricing from Chinese producers. Segment revenue stood at Rs. 4,149 crore, up 1 percent year-on-year, while EBITDA declined 29 percent to Rs. 350 crore due to higher input costs.
Chemicals (Chlor-Alkali, Chlorine Derivatives & Specialty Chemicals)
International caustic soda prices declined 5 percent year-on-year to $449 per ton, but domestic realizations remained higher on account of stable demand and rupee depreciation. ECU realizations improved 8 percent to Rs. 32,979 per ton, while caustic sales volumes remained flat due to power constraints. Specialty chemical volumes increased 34 percent year-on-year with improved utilization at the new plant. Segment revenue grew 17 percent year-on-year to Rs. 2,399 crore and EBITDA increased 34 percent to Rs. 365 crore, supported by higher chlorine derivative volumes and better realizations.
Building Materials (Cement, Paints & B2B E-Commerce)
Despite monsoon-related weakness, segment revenue increased 28 percent year-on-year to Rs. 22,253 crore and EBITDA rose 55 percent to Rs. 2,950 crore, driven by strong performance in cement, partly offset by initial investments in paints and e-commerce businesses.
- Cement (UltraTech): Cement business revenue was Rs. 19,607 crore, up 20 percent year-on-year, supported by both higher volumes and improved realizations. Sales volume stood at 33.85 million tons, up 6.9 percent year-on-year, while EBITDA per ton improved 32 percent to Rs. 966. The green power mix increased to 41.6 percent from 30.2 percent in the previous year, with a target of reaching 85 percent by FY30. UltraTech announced expansion plans to increase total capacity to 240.8 million tons per annum by March 2028.
- Paints (Birla Opus): The paints business continued to gain market share, establishing itself as India’s second most recalled decorative paints brand. With the commissioning of the Kharagpur plant in October 2025, total capacity reached 1,332 MLPA, representing around 24 percent of industry capacity. The distribution network expanded to more than 10,000 towns with 191 products and over 1,750 SKUs. Industry-first initiatives like Opus Assurance and the PaintCraft premium service enhanced brand trust and customer engagement. Cumulative capex for the paints business stood at Rs. 9,727 crore till September 2025.
- B2B E-commerce (Birla Pivot): Birla Pivot maintained strong momentum with 15 percent quarter-on-quarter revenue growth, driven by new customer additions, repeat orders, and an expanding product mix. The business remains on track to achieve Rs. 8,500 crore in revenue by FY27. Its portfolio now covers over 35 categories and 40,000 SKUs sourced from 300 brands, strengthening its digital presence and customer experience.
Financial Services (Aditya Birla Capital)
Financial services revenue rose 3 percent year-on-year to Rs. 10,569 crore. The lending portfolio increased 29 percent to Rs. 1.78 lakh crore, while total AUM grew 10 percent to Rs. 5.5 lakh crore. The Aditya Birla Capital Digital (ABCD) platform reached 7.6 million customers, and the Udyog Plus MSME platform recorded over 2.4 million registrations with Rs. 4,397 crore AUM. The total branch network expanded to 1,712, targeting deeper reach into tier 3 and 4 towns.
Other Businesses (Textiles, Renewables & Insulators)
Other businesses reported revenue of Rs. 996 crore and EBITDA of Rs. 249 crore, led by strong growth in the renewable energy segment. Installed renewable capacity doubled year-on-year to 1.93 GWp, with 43 percent capacity share for group companies. The textiles business reported a 6 percent rise in revenue to Rs. 586 crore, with EBITDA of Rs. 24 crore compared to a loss last year, aided by festive demand and normalization of input costs.
Capital Expenditure
Total capital expenditure for Q2FY26 was Rs. 461 crore and Rs. 941 crore for the first half of FY26. Paints cumulative capex reached Rs. 9,727 crore. In cellulosic fibres, Phase 1 of the 55 KTPA expansion project is progressing well, with commissioning targeted by mid-2027.
About the company
Grasim Industries Limited, founded in 1947 and headquartered in Mumbai, is a diversified conglomerate operating in India and globally across multiple sectors. Its key business segments include cellulosic fibres, chemicals, building materials, financial services, and textiles. The company manufactures viscose staple fibre, fashion yarns, chlor-alkali products, chlorine derivatives, and specialty chemicals. It also produces grey and white cement, putty, ready-mix concrete, and decorative paints under the Birla Opus brand.
Through Birla Pivot, Grasim runs a B2B e-commerce platform for construction materials. Its financial arm offers non-banking financial services, housing finance, asset management, and insurance. In textiles, it markets products under brands like Linen Club, Cavallo, Soktas, and Giza House. Additionally, it manufactures ceramic and composite insulators and invests in renewable energy generation from solar and wind sources.
As of September 2025, the company’s shareholding pattern shows that promoters hold 43.11 percent of the total equity, indicating strong promoter ownership. Foreign Institutional Investors (FIIs) hold 14.37 percent, while Domestic Institutional Investors (DIIs) own 17.27 percent. The public shareholding stands at 24.92 percent and other stands at 0.31 percent, reflecting a healthy level of retail participation in the company.
Written By Akshay Sanghavi
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