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4	4
5	5	= Overview =
6	6
7		-Grasim Industries Limited, 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.{{footnote}}https://www.grasim.com/about-us/who-we-are{{/footnote}}
	7	+Grasim Industries Limited, (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.{{footnote}}https://www.grasim.com/about-us/who-we-are{{/footnote}}
8	8
9	9	= Business Segment =
10	10
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72	72
73	73	= Business Overview =
74	74
75		-Viscose
	75	+== Viscose ==
76	76
77		-"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."
	77	+"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."{{footnote}}https://www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf{{/footnote}}
78	78
79		-[[https:~~/~~/www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf>>url:https://www.grasim.com/upload/pdf/grasim-annual-report-fy-2019.pdf]]
80		-
81	81	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.
82	82
83	83	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.
84	84
85		-
86	86	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.
87	87
	85	+== Chemicals ==
88	88
89		-Outlook
90		-
91		-The VSF business is slated to grow vigorously, expanding the market in India by partnering with the textile value chain. It will achieve better customer connect through its brand LIVA and related products, through a larger share of specialty fibre. VSF continues to be the fastest growing textile fibre globally. However, new capacities recently commissioned in Asia may create temporary demand supply mismatch and resultant pressure on prices.
92		-
93		-The global demand for VSF is likely to grow at a CAGR of 6-7% over the next 2-3 years, tad higher than the growth of competing fibres like cotton and polyester. The Asia-Pacific region is witnessing a healthy growth in the demand for this product. This is due to its special natural attributes and increased popularity in countries like India and China, which make it “a preferred fibre of choice”
94		-
95		-
96		-Chemicals
97		-
98	98	The global prices of caustic soda were volatile during the year led by multiple factors like:
99	99
100		-•
	89	+* Closure of alumina refinery in South America
	90	+* There were limited environment related shutdown in China during the winter months to control pollution level and
	91	+* Mandatory adherence to BIS guidelines in India.
101	101
102		-Closure of alumina refinery in South America
103		-
104		-There were limited environment related shutdown in China during the winter months to control pollution level and
105		-
106		-Mandatory adherence to BIS guidelines in India.
107		-
108		-
109	109	In India, the prices remained firm during the year driven by stable demand conditions and slowdown in imports.
110	110
111	111	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.
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112	112
113	113	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.
114	114
115		-
116	116	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).
117	117
	101	+== Textiles ==
118	118
119		-Outlook
120		-
121		-The Chemical business is witnessing expansion in both Chlor-alkali and specialty chemicals. The recent acquisition of Chlor-alkali business of KPR Industries Limited (plant under construction) is aimed at increasing the market share in the Eastern region of India, a caustic consumption hub. This, coupled with ongoing brownfield expansion projects at other sites and new product lines for specialty chemicals will lead to an upward swing in the business in the near future.
122		-
123		-
124		-Textiles
125		-
126	126	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.
127	127
128	128	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.
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133	133
134	134	Grasim has brands rights for the “SOKTAS”, “Giza House” and “Excellence by SOKTAS” brands in key territories including India, Bangladesh and Nepal.
135	135
136		-The general business outlook remains positive in view of the overall demand condition.
	113	+== Insulators ==
137	137
138		-
139		-Insulators
140		-
141	141	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.
142	142
143	143	The Insulator industry may continue to remain subdued due to lack of investment in the power sector in the Country.
144	144
	119	+== UltraTech Cement Ltd. (A subsidiary of the Company) ==
145	145
146		-UltraTech Cement Ltd. (A subsidiary of the Company)
147		-
148	148	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.
149	149
150	150	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.
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151	151
152	152	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.
153	153
	127	+== Aditya Birla Capital Ltd. (A subsidiary of the Company) ==
154	154
155		-Aditya Birla Capital Ltd. (A subsidiary of the Company)
156		-
157	157	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%.
158	158
159	159	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.
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162	162
163	163	In the Health Insurance business, Gross written premium increased to ` 497 Crore (FY19), almost doubled as compared to the previous year.
164	164
	137	+= Financial Highlights =
165	165
166		-Financial Highlights
167		-
168		-
169	169	On February 10, 2020; Grasim Industries Limited announced its unaudited financial results for the quarter and Nine months ended 31st December 2019
170	170
	141	+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.{{footnote}}https://www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf{{/footnote}}
171	171
172		-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.
	143	+== Viscose Business ==
173	173
174		-[[https:~~/~~/www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf>>url:https://www.bseindia.com/xml-data/corpfiling/AttachHis/058d9115-fda0-4c29-b7d2-b6949b69a8f2.pdf]]
175		-
176		-
177		-Viscose Business
178		-
179	179	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.
180	180
181	181	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.
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186	186
187	187	The 219 KTPA Vilayat Brownfield capacity expansion is progressing as per schedule and expected to be commissioned by FY21.
188	188
	155	+== Chemical Business ==
189	189
190		-Chemical Business
191		-
192	192	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.
193	193
194		-
195	195	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.
196	196
197		-
198	198	The Caustic Soda capacity expansion projects at Rehla, Vilayat and Balabhadrapuram are at different stages of execution with expansion of specialty chemical products too
199	199
	163	+== Capex Plan ==
200	200
201		-Capex Plan
202		-
203	203	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.
204	204
	167	+== Cement Subsidiary - UltraTech ==
205	205
206		-Cement Subsidiary - UltraTech
207		-
208	208	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.
209	209
210	210	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.
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213	213
214	214	UltraTech Nathdwara Cement Limited is fully integrated with the UltraTech systems and processes. The plants have achieved optimal efficiencies and are PBT accretive.
215	215
	177	+== Financial Services Subsidiary – Aditya Birla Capital Limited (ABCL) ==
216	216
217		-Financial Services Subsidiary – Aditya Birla Capital Limited (ABCL)
218		-
219	219	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.
220	220
221	221	The Overall lending book (NBFC and Housing Finance) stood at `60,123 Cr. (Q3FY20).
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228	228
229	229	In the Health Insurance business, Gross written premium increased to `547 Cr. (9MFY20), up 73% YoY.
230	230
	191	+== Outlook ==
231	231
232		-Outlook
233		-
234	234	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.
235	235
236	236	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.
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241	241
242	242	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.
243	243
	203	+= References =
244	244
245		-
246		-References
247		-
248	248	{{putFootnotes/}}