Grasim Industries Limited, (NSE:GRASIM) a flagship company of the US$ 48.3 Billion Aditya Birla Group, ranks amongst the top publicly listed companies in India. Incorporated in 1947, it started as a textiles manufacturer in India. Today, it has evolved into a leading diversified player with leadership presence across many sectors. It is a leading global producer of Viscose Staple Fibre, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India’s largest cement producer and a leading diversified financial services player. At Grasim, there is an endeavour to create sustainable value for 21,000+ employees, 230,000+ shareholders, society and customers. It has a consolidated net revenue of over US$ 10 Billion and an EBITDA of over US$ 1.8 Billion in FY 2019.1

Business Segment

Viscose Staple Fibre

Grasim is India's pioneer in VSF — a man-made, bio-degradable fibre that is fast emerging as a sustainable alternative to cotton. A versatile fibre, VSF is used in apparel, home textiles, dress materials, knit wears and non-woven applications. The company's Birla Cellulose range of fibres can be used in their original form, or can be blended with all natural and synthetic fibres for enhanced comfort and feel.2

Starting production in 1954 at its Nagda facility, the business has grown steadily over six decades. The Pulp & Fibre Business derives its competitive edge from its integrated business model, with captive raw materials - dissolving grade wood pulp, caustic soda, carbon-disulphide, power generation and steam.

Through brownfield expansion and debottlenecking initiatives, the company plan to expand VSF capacity to 788 KTPA from 566 KTPA by FY 2020-21.

Viscose Filament Yarn

Grasim is one of India’s major Viscose Filament Yarn (VFY) player. Also known as rayon, VFY is a natural fibre which can be made to resemble silk, cotton and wool in its feel and texture.  Known for its versatility, VFY has superior drape, fluidity and lustre which makes it a popular choice for manufacturing fabrics such as georgettes, crepes and chiffons. Manufactured under the brand name, Raysil (formerly RayOne), by Grasim’s Indian Rayon unit, the VFY comes in a wide range of 600 shades with the flexibility of reproducing any shade to suit customer needs.3

The VFY business became a part of Grasim on 1st July, 2017, following the merger of Aditya Birla Nuvo Ltd. Subsequently, Grasim acquired the rights to operate and manage the Century Rayon division of Century Textiles and Industries Ltd. (CTIL) from the 1st of February, 2018.  Since then, Grasim’s production of VFY capacity has increased from 21 KTPA to 47 KTPA. It also accounts for 55% of VFY exports from India making it the largest exporter of VFY in India.

The Indian Rayon unit, located at Veraval in Gujarat, is the first to be accredited with the ISO 9001:2000 and the ISO 14001:2004 certification. It also has the OHSAS 18001 and OEKO Tex certification.


In 1972, Grasim’s chemicals business was set up to manufacture caustic soda for the company’s VSF unit. Today, it is one of India’s largest caustic soda producers and is a market leader in the chlor-alkali segment.  Over the years, Grasim’s chemicals business has created a strong foothold in the industry and offers a wide range of products from chlorine derivatives to epoxy.4


In 2016, Grasim’s merger with Aditya Birla Chemicals India Ltd. (ABCIL) helped catapult the company’s caustic soda capacity from 452 KTPA to 884 KTPA making it the largest producer of caustic soda in India back then. Today, Grasim’s total caustic soda capacity is 1,147 KTPA. In FY19, the chlor-alkali business achieved 1 million tonnes of caustic sales entering the ivy league of top 10 businesses in the sector globally.

The business uses cost-effective membrane cell technology and is largely self-sufficient in power. For gainful utilisation of chlorine, the business has portfolio of chlorine derivatives like Stable Bleaching Powder (SBP), Polyaluminium Chloride (PAC), Chlorosulphonic Acid (CSA), Chlorinated Paraffin Wax (CPW), Calcium Chloride (CaCl) and Aluminium Chloride (AlCl).


The business’ epoxy products range from basic products like liquid epoxy resins to value added products like formulated resins, reactive diluents and hardeners. The manufacturing complex at Vilayat houses a 123 KTPA capacity epoxy plant.


Grasim ventured into the textiles industry in 1949 by setting up Jaya Shree Textiles at Rishra, West Bengal. Today, Jaya Shree Textiles is one of India’s leading linen and wool manufacturers. It has four strategic business units (SBUs) i.e., linen spinning, linen fabric, wool combing and worsted spinning. All four SBUs are driven by the common goal of making the workplace a source of creativity, innovation, and self-fulfilment for all employees. It is the only integrated linen factory in the country with state-of-the-art facilities equipped with the latest spinning, weaving and finishing systems from Switzerland and Italy. Today, Jaya Shree Textiles sells its products in over 50 countries, spanning across six continents.5

Jaya Shree Textiles has provided the evolving Indian fashion industry with an international edge. Finest flax is sourced from France, Belgium and other parts of Europe to make 100% pure linen. Cutting edge European technology is used to spin the fibres, weave and dye them which makes it unique and difficult to replicate. This superior technology also enables Jaya Shree Textiles to manufacture over 3000 different types of weaves, textures and blends. The company has significantly revolutionised the Indian textile market by popularising linen in India across a wide customer base with its brand ‘Linen Club’.

Over the years, Jaya Shree Textiles has become a preferred textile company for wool tops, 100% wool and wool blended yarns, for both weaving and knitting, pure linen yarn, pure linen fabrics and linen blended fabrics — both globally as well as in the domestic markets.

In 1995, the company established Vikram Woollens at Malanpur in Bhind, Madhya Pradesh. A prominent player in the worsted yarn segment, it offers a wide range of wool and wool blends such as wool and polyester, wool, polyester and lycra, wool land silk, wool and nylon and speciality yarns such as 100% cashmere and cashmere blends. The superior product quality has helped it establish a strong foothold in markets across India. Vikram Woollens has recorded robust growth in the Indian textiles market and is today an emerging leader of the Indian textiles business.


Grasim’s fertiliser division, Indo Gulf Fertilisers (IGF) is a leading agri-solutions provider. From sowing to harvesting, it develops solutions and products for each stage of farming. Marketed under the name ‘Birla Shaktiman’, the brand is one of the most popular fertiliser brands in the Indo-Gangetic plain, the core market where it operates.6

With optimisation at the core of its operation, IGF is also the most energy-efficient urea plant in India. Moreover, IGF reaches around 6M farmers through a unique customer centric approach serving them through soil testing, Six Sigma demonstrations, farmer group meetings and field days.

The full-range of offerings include:

  • Neem-coated urea
  • Soil and crop specific customised fertilisers
  • Seeds
  • Agrochemicals
  • Plant and soil health products

The strong focus on innovation has helped IGF launch a variety of products that cater to different needs and establish itself as the market leader. The company was the first to launch neem-coated urea in 2003. It also develops fertilisers customised for different crops. Sold under the brand name ‘Birla Shaktiman Vardaan’, the fertilisers are a blend of macro and micro nutrients providing complete nutrition to paddy, wheat, potato, sugarcane and corn crops. Along with a wide range of agrochemicals, micronutrients, organic fertilisers, plant growth promoters, water soluble fertilisers and bio stimulants the company also manufactures hybrid varieties of rice and maize seeds.


Aditya Birla Insulators is India’s largest manufacturer of electrical insulators and is amongst the top four insulator manufacturers globally. It produces the widest range of insulators in India including insulators for transmission lines & substations up to 1200 kV voltage level, as well as equipment & railways. Its total installed manufacturing capacity is 56,400 TPA with specialisation in both ceramic and composite insulators. The company set up Aditya Birla Power Composites Limited (ABPCL), a joint venture with Maschinenfabrik Reinhausen GmbH of Germany in 2019 to set up a state-of-the-art CHCI manufacturing plant at Halol, Gujarat, India.7

Its insulators have stood the test of quality and reliability under some of the toughest operating conditions. The ceramic insulators last as long as three decades and composite insulators display a superior operational performance in high pollution & coastal areas. This high operational efficiency and a long life cycle makes them one of the most sought-after products in the industry. It is a preferred partner for major power utilities as well as equipment manufacturers globally. Aditya Birla Insulators is one of the largest exporters of ceramic insulators globally, operating across 58 countries.

Business Overview


"VSF demand in India witnessed a double digit growth for the second consecutive year. Grasim has been at the forefront of driving the VSF consumption in India with the Launch of LIVA in 2014. In FY19 the Company introduced Livaeco and Liva Home as an extension of the brand LIVA. VSF demand in India is expected to maintain its growth momentum and witness a high single digit growth for the next 2-3 years."8

In FY19 ~1 MTPA of capacity was added by VSF players in Asia taking the overall capacity to 7 MTPA. This is expected to create a demand supply imbalance in the shorter time frame.

VFY sales volume has increased substantially during the current year led by acquisitions of rights to operate and manage Century Rayon by the Company effective from 1st February 2018.

During FY19 prices of Chinese VSF declined. On the other hand, global cotton and polyester prices witnessed an increase. In India, cotton prices experienced a double digit price increase owing to lower domestic production, depletion in the cotton reserves of China, and hike in the MSP (Minimum Support Price) of Indian cotton crop. Polyester prices globally have maintained an upward trend due to a spike in the crude oil prices.


The global prices of caustic soda were volatile during the year led by multiple factors like:

  • Closure of alumina refinery in South America
  • There were limited environment related shutdown in China during the winter months to control pollution level and
  • Mandatory adherence to BIS guidelines in India.

In India, the prices remained firm during the year driven by stable demand conditions and slowdown in imports.

Domestic consumption of caustic soda is expected to increase by 2-3% over the medium term on account of a strong demand from key consuming sectors such as textile, alumina, pulp and paper, and chemicals industries.

The Company achieved a new milestone of 1 Million Tonne Sales of Caustic Soda this year, the first company in the Country to attain this record.

Over the years, the demand for chlorine remained firm with prices maintaining a stable trend. The Company is a global leader in the chlorine Value-Added Products (VAP) such as AICI3 and stable bleaching powder. In India, the company hold a leadership position in CP (ChlroParafin), PAC (Poly Aluminium Chloride) and PA (Phosphoric Acid).


Grasim’s textiles business has Linen and Wool as the popular product lines. Grasim Textiles business for FY 2018-19, reported a Revenue of ` 1,501 Crore and EBITDA of ` 139 Crore.

The company's Linen business maintained its leadership in the Linen Market with ~45% market share in linen fabric (Pure Linen category) and ~45% in linen yarn. The retail arm of the business, under the brand “Linen Club” is one of the largest single brand franchise network in India. It added 28 new ‘Linen Club’ EBOs, during FY 2018-19, with a total count of 200 EBOs. Besides fabrics, Linen Club Stores also offer wide range of Linen Apparel. Further, during the year, linen business ventured into intimate blend fabrics and apparels by launching two new brands “Mazury”  and “Cavallo” respectively. Cavallo is supplied through E-Commerce channels.

The company's Wool operation has integrated combing and spinning facilities. The company export to over 30 countries with a wide product basket and good share of Value Added Products. The company continue to be the market leaders in domestic wool combing market with 40% capacity market share.

The acquisition of 100% equity of Soktas India Private Limited by the company for ` 135 Crore is aimed at expanding its leadership in the premium fabric segment, complementing its existing linen business. SIPL has since been renamed as Grasim Premium Fabric Pvt. Ltd.

Grasim has brands rights for the “SOKTAS”, “Giza House” and “Excellence by SOKTAS” brands in key territories including India, Bangladesh and Nepal.


The demand growth for insulator industry is being driven by power generation, transmission and distribution. The business generated Revenue of ` 434 Crore and EBITDA of ` 22 Crore for FY 2018-19.

The Insulator industry may continue to remain subdued due to lack of investment in the power sector in the Country.

UltraTech Cement Ltd. (A subsidiary of the Company)

India’s cement sector witnessed an encouraging double digit demand growth in FY19 highest since FY10. India’s cement industry is a vital part of its economy, providing employment to more than a million people, directly or indirectly. The demand growth was driven by Infrastructure projects, low cost housing and performance of the Industrial and commercial sector. The overall demand phase is expected to maintain positive momentum in the months ahead. Increase in demand will facilitate greater capacity utilization.

UltraTech was a beneficiary of the strong demand growth. The consolidated sales volume registered an increase of 17% on YoY basis to ~76mtpa (FY19). The Consolidated Net Revenue in FY19 witnessed a growth of 21% to ` 37,379 Crore and EBITDA increased by 7% to ` 7,226 Crore.

The Board of Directors of UltraTech had approved a Scheme of Demerger amongst Century Textiles and Industries Limited (Century) and UltraTech and their respective shareholders and creditors (the Scheme). In terms of the Scheme, Century would demerge its cement business into UltraTech.

Aditya Birla Capital Ltd. (A subsidiary of the Company)

The Aditya Birla Capital reported a strong Financial Performance. The Revenue and Net Profit after Tax for FY19 increased to ` 15,032 Crore and ` 566 Crore up by 65% and 37%.

The NBFC Lending book (Including housing finance) expanded 23% YoY to ` 63,119 Crore (FY19) The Average Assets Under Management at ` 2,65,109 Crore (FY19) is up 6% YoY.

In Life Insurance business, the Individual First year Premium are up 56% to ` 1,798 Crore in FY19. The persistency ratios also witnessed a consistent improvement, to 78% (FY19) up 3%.

In the Health Insurance business, Gross written premium increased to ` 497 Crore (FY19), almost doubled as compared to the previous year.

Financial Highlights

On February 10, 2020; Grasim Industries Limited announced its unaudited financial results for the quarter and Nine months ended 31st December 2019

Consolidated Revenue for the nine months ended 31st December 2019 stood at `57,724 Cr. recording a growth of 5%. Consolidated PBT at ` 6,387 Cr. recorded a growth of 23% YoY. Revenue and EBITDA for the quarter, however, remained largely flat.9

Viscose Business

In the VSF business, production and sales volume recorded an increase of 5% and 3% YoY to 148KT and 138KT respectively. The Net Revenue for the viscose segment (including VFY) stood at `2,194 Cr. and EBITDA for the quarter stood at `256 Cr.

This quarter’s profitability was impacted primarily by the drop in the domestic VSF prices, on the back of weakening global prices owing to large supply surplus triggered by new capacity additions in Asia in last one year and global demand slowdown caused by U.S-China trade war. The reduction in the domestic VSF prices was accelerated to counter surge in cheap yarn imports from China/Indonesia which impacted viability of Indian spinners. The domestic VSF prices may witness some improvement in the near term with improving sentiments post phase-1 of US-China trade deal and near-term global supply constraints from China.

The benefit of falling pulp prices will get reflected in the coming quarters due to lag in inventory consumption.

The company's Liva brand for VSF products continues to grow its reach in the domestic market, partnering with over 40 retail brands and is available at over 3,600 outlets.

The 219 KTPA Vilayat Brownfield capacity expansion is progressing as per schedule and expected to be commissioned by FY21.

Chemical Business

The Net Revenue for Q3FY20 stood at `1,362 Cr. and EBITDA stood at `185 Cr. Global caustic soda prices were soft during the quarter. Domestic caustic prices were impacted due to increased domestic capacity, rise in imports and weak demand.

Caustic Soda sales and production volume for Q3FY20 stood at 257KT and 261KT respectively. The speciality chemicals (Value added chlorine product) profitability was impacted by slowdown in demand. The share of EBITDA from Speciality chemicals including Epoxy resins stood at ~1/3 of Chemical business.

The Caustic Soda capacity expansion projects at Rehla, Vilayat and Balabhadrapuram are at different stages of execution with expansion of specialty chemical products too

Capex Plan

The total capex plan of ~`7,800 Cr. (at standalone level) is under execution for raising capacities in both the VSF and Chemical businesses, apart from ongoing modernisation capex at various plants. This capital expenditure is expected to be incurred over three years period from FY20-FY22.

Cement Subsidiary - UltraTech

UltraTech reported Consolidated Revenue of `10,354 Cr. and EBITDA of `2,141 Cr. in Q3FY20 up 25%YoY. PAT stood higher at `712 Cr. up 80% YoY. The consolidated sales volume stood at ~20.90 MTPA.

The acquired plants of Century ramped up production touching a capacity utilization of 79% in Dec-19. Brand and operational integration is underway and is expected to reach 84% by Q2FY21.

UltraTech has divested its entire shareholding in Emirates Cement Bangladesh Ltd. and Emirates Power company Ltd. to Heidelberg Cement Bangladesh at Enterprise Value of BDT equivalent of US$ 30.2 Million.

UltraTech Nathdwara Cement Limited is fully integrated with the UltraTech systems and processes. The plants have achieved optimal efficiencies and are PBT accretive.

Financial Services Subsidiary – ABCL

The Revenue and Net profit after minority interest for Q3FY20 (as reported by ABCL) are at `4,326 Cr. and `250 Cr. up by 14% and 17% respectively.

The Overall lending book (NBFC and Housing Finance) stood at `60,123 Cr. (Q3FY20).

NBFC and HFC have optimised asset and liability mix with adequate liquidity to meet growth requirements.

The Average Assets Under Management stood at `2,65,475 Cr. (Q3FY20).

In Life Insurance business, the Individual First year Premium are up 14% to `1,261 Cr. in 9MFY20. The persistency ratios witnessed a consistent improvement, the 13th month persistency ratio improved by 562 bps to 80.9 % in Q3FY20.

In the Health Insurance business, Gross written premium increased to `547 Cr. (9MFY20), up 73% YoY.


The VSF business will continue to focus on expanding the market in India by partnering with the textile value chain, achieving better customer connect through its brand LIVA and extension into new categories. VSF continues to be the fastest growing textile fibre globally. The economic standstill in China and improved sentiment post phase-1 of U.S China trade war may lead to some improvement in VSF prices in near term, however the underlying supply-demand imbalance is likely to continue for some time.

The Chemical business is under an expansion mode for both chlor-alkali and specialty chemicals. The ongoing expansion projects at different sites and new product lines for specialty chemicals will enable growth of the business. Simultaneously, the business is focusing in reducing cost of power (a key input) by optimizing power mix and increasing share of renewable power.

In Cement, signs of revival were visible in some markets during the latter part of Q3FY20. This, together with the Government's firm commitment to revive the economy and the thrust on infrastructure spending augur well for the growth of cement demand. The company with its presence across the country, is the best positioned to take advantage of the revival in cement demand, despite the anomalies that may get created in demand patterns in some parts of the country due to extraneous reasons.

In Financial Services, ABCL is a universal financial solution provider catering to the diverse needs of its customers across their life cycle. ABCL is committed to serving the end-to-end financial services needs of its retail and corporate customers under a unified brand — Aditya Birla Capital.

Grasim is incurring capex to increase capacities across its key businesses and is potentially well positioned to leverage the next phase of the economic growth.


  1. ^ https://www.grasim.com/about-us/who-we-are
  2. ^ https://www.grasim.com/about-us/our-businesses/viscose-staple-fibre
  3. ^ https://www.grasim.com/about-us/our-businesses/viscose-filament-yarn
  4. ^ https://www.grasim.com/about-us/our-businesses/chemicals
  5. ^ https://www.grasim.com/about-us/our-businesses/textiles
  6. ^ https://www.grasim.com/about-us/our-businesses/fertilisers
  7. ^ https://www.grasim.com/about-us/our-businesses/insulators
  8. ^ https://www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf
  9. ^ https://www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf
Created by Asif Farooqui on 2020/05/18 18:46
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