Ladies and gentlemen, good day, and welcome to Grasim Industries Limited Q3 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head, Investor Relations of Grasim Industries. Thank you, and over to you, Mr. Ankit.
Hi. Good morning, and thank you for joining Grasim's third quarter financial year 2026 earnings call. The financial statements, press release, and presentation are already uploaded on the websites of stock exchanges and our website for your reference. For safe harbor, kindly refer to cautionary statement highlighted in the last slide of our presentation. Our management team is present on this call to discuss our results and business performance. We have with us Mr. Himanshu Kapania, Managing Director, Grasim Industries, and Business Head, Birla Opus Paints. Mr. Hemant Kadel, Chief Financial Officer of Grasim Industries. Also joining them, we have with us Mr. Jayant Dhobley, Business Head of Chemicals, Cellulosic Fashion Yarn, and Insulators. Mr. Vadiraj Kulkarni, Business Head of Cellulosic Fibers Business. And Mr. Sandeep Komaravelly, CEO, Birla Pivot, our B2B e-commerce business.
Let me now hand over the call to Himanshu, sir, for his opening remarks. Over to you, sir.
Good morning, and a very warm welcome to everyone joining us today. At the outset, we wish all of you a Happy New Year, 2026. We hope that the year has begun on a positive note for you and your families, and it brings good health, continued progress, and renewed optimism. As we step into 2026, we do so with a sense of confidence and purpose. While the global environment continues to evolve, the underlying strength of our markets, the resilience of demand, and our disciplined execution gives us optimism about the road ahead. The new year represents not just a change in calendar, but an opportunity to build on momentum, sharpen our focus, and deepen the value we create for our stakeholders. On that value creation, let me start sharing key updates on two of our latest growth engines.
As announced earlier, our paints business, Birla Opus CEO, Mr. Sachin Sahay, shall join us from 16th February 2026. Despite the absence of CEO, the existing paints team delivered an extraordinary performance, reaffirming the company is being built on rock-solid foundation and has a long pipeline of leadership who can take on the baton when the need arises. During quarter 3 of FY 2026, Birla Opus, the third largest decorative paints player, expanded its revenue market share by more than 300 basis points year-on-year, based on internal estimates and announced results of listed paints majors. On quarter-on-quarter basis, Birla Opus accelerated its market share gains with revenue growth of nearly 3 times the Indian decorative paints industry growth rate, inclusive of Birla Opus.
Further, the combined revenue of Birla Opus and Birla White putty business in quarter three, FY 2026, the revenue market share gap with existing number two paint player is now reduced to around 300 basis points, based on the guided decorative segment revenues, which includes their putty business as well. In quarter three, FY 2026, Birla Opus sales volume has risen by 70% on year-on-year basis. Early this January, Birla Opus has crossed the milestone of 500 million liters of paint sales cumulatively. We believe that more than 6 million households are now experiencing superior quality of Birla Opus in a short period of 18 months. Birla Opus' exponential growth is underpinned by rising brand acceptance, rapid expansion of distribution network, strong sales throughput from dealer counters to contractors and consumers, consistent differentiation through superior quality, product quality, and focused brand-building efforts.
Let me give you finer details of execution on the above. First, on brand reach. The presence of Birla Opus has crossed 10,400 towns across 35 states and union territories. We have covered all 50,000 population centers across India and more than 75% of the 10,000-50,000 population centers. The company will continue its expansion effort deeper into Bharat. The active quarterly billing dealers has grown in double digits, along with a single high single-digit growth per dealer revenue throughput on month-on-month when compared with last year, same quarter. Additionally, Birla Opus is transforming the paints consumer retail experience with company exclusive franchise outlets, nearing 1,000 Birla Opus paint galleries. These galleries uplift consumer experience while selecting a paint brand, helping premiumization of the category.
Institutional sales continued to gain traction during the quarter, supported by increasing project wins and specification approval among clients, including governments, builders, factories, hospitals, and cooperative housing. So the institutional sales grew by 40% quarter-on-quarter. As institution orders has a long gestation period, happy to report more than 40,000 mid and large-size projects are in various stages of negotiation, with nearly 25% built, thereby a strong project pipeline for future. Secondly, Birla Opus remains focused on driving secondary sales from dealer counters to contractors and consumers. The 10% free paint promotion continues on 10- and 20-liter packs across all emulsion top coats, waterproofing range. However, excludes sub-economy and other categories. The company is equally focused on building relationships with paint contractors, the key influencers.
For them, Birla Opus has built an end-to-end, first of its kind, digital platform to engage with contractors online on pan-India basis for product information, incentives and schemes, sharing consumer leads, Opus Assurance registration, complaint handling, and much more. This platform is integrated with our unique track and trace system to monitor consumption by customers at pin code and dealer levels. We are also implementing AI-based projects to improve contractor connect and analytics. I'm happy to share that over 7.5 lakh contractors and painters have applied and experienced Birla Opus superior range of products on pan-India basis. This online platform allows us to remain always in touch digitally with the unorganized painter community, and instantly transfer accrued benefits to their banks on a click of a button from their app anywhere, anytime, and experience like UPI.
Additionally, the centrally controlled tinting machine analytics shows strong colorant consumption across geographies. With over 35,000 active tinting machines in operation during quarter three, the tinting data shows interesting consumer insights. The top two Opus colors unifying the country include Fort Kochi, a dark bluish gray color, and a Morning Birdsong, a light bluish gray shade, which are tinted by more than 30,000 dealers in the last one year. Thirdly, the foundation of our product strategy is built on R&D excellence, with a portfolio designed for performance, durability, and unmatched finish. Birla Opus has achieved what we believe is the fastest portfolio expansion by any brand in the industry. Today, Birla Opus proudly offers one of the widest product ranges of more than 216 products, 1,848 SKUs across emulsions, enamels, waterproofing, wood finish, wallpaper, and others.
This year itself, till now, we have introduced 40 new products, including the completion of retail waterproofing line, launch of painting tools, and indigenously developed Italian PU alkyd range, and many more. These innovations are not just additions, they are accelerators of growth, which is creating clear product differentiation, winning the trust of dealers and delighting consumers. The fourth powerful driver of Birla Opus is creating consumer pull by our sustained brand salience and differentiated marketing. According to Opus commissioned brand track study , the top-of-mind brand recall for Birla Opus has surged into double digits, positioning us as the second most recalled paints brand in urban markets. With over 6 million satisfied home users acquired in a very short period, Birla Opus brand acceptance will continue to accelerate, providing solid impetus to growth.
From builders and government bodies to industry, hotels, education institutions, and MSMEs in the project segment, to individual homeowners and housing cooperatives, Birla Opus brand trust is on the rise. With a strong media presence in quarter four and high engagement campaign, our brand salience is set to soar even higher. Watch out for our latest Opus Boy campaign, Color of Togetherness, in the ongoing T20 World Cup and upcoming IPL 2026, and many other regional and national impact properties on television, digital, and outdoor media. Our premiumization effort continue with PaintCraft, the recently launched Birla Opus professional painting services. Fully GST compliant, transparent pricing, attractive EMI options, end-to-end platforms from lead management to quotation, to monitoring of services and quality approval, managed jointly by central and field team.
This service has expanded to over 5,000 pin codes, and we target to offer PaintCraft on pan-India basis through the 1,000 paint galleries at the earliest. Separately, on Opus Assurance services, where the company has given additional guarantee besides the standard warranty clause to redo the painting, including labor, if need arise. More than 60,000 consumer sites have been registered through nearly 30,000 contractors under this first-of-its-kind program. The combination of PaintCraft and Opus Assurance will improve consumer experience, allowing us to sell higher-end products and premium services. The fifth powerhouse behind Birla Opus Momentum is the second largest manufacturing capacity holder in the industry, a formidable 24% capacity share.
With the launch of Kharagpur and a steady ramp-up of capacity utilization across each of our six plants, the company has executed the natural production strategy by producing fast-moving category products closer to their market, cutting down the drag of logistics cost and inventory, and sharpening its service edge. With the completion of project on time and within budgeted CapEx, the focus of the company now has shifted to improve productivity, efficiency operations, and bring down significant variable costs through optimization. At the heart of our manufacturing journey lies a bold embrace of Industry 4.0, with IoT-driven automation, helping standardization and consistency of quality. This excellence is now officially validated.
We are proud and excited to share that Birla Opus has received Integrated Management System certificate, encompassing ISO 9001, 14001, and 45001, for all the six plants in one go. Achieving these certifications strengthens our organizational framework and reinforces confidence of our customers, partners, stakeholders in our capabilities. Securing IMS certification in less than 18 months of full-scale operation is an unprecedented milestone. It underscores our deep commitment to the highest standards of quality, safety, environmental stewardship, compliance, and operational excellence, and marks a powerful step forward in our ongoing sustainability evolution. Before I move on to the next business, I wish to address the narratives about sluggish industry growth.
Based on announced results of four listed paint majors and guidance on their decorative business, it appears the decorative paints, excluding Birla Opus, has grown by 1%-2% by revenue, but 7%-8% by volume in quarter 3, FY 2026 versus quarter 3, FY 2025. Now, when we add Birla Opus quarter 3 performance to these four players' decorative paints business, industry revenue growth, including Opus, rises to 5%-6%, and volume growth jumps to 11%-12%. In my economic understanding, a double-digit volume growth reflects a good to strong consumer demand. However, the pain of the industry is rate realization, which we believe is lower due to combination of higher discounting and incumbent players' tendency to focus on low-value economy, sub-economy category, and deep discounted putty business.
Birla Opus revenue is without putty, and our growth remains balanced across all categories of paints, with premium and luxury segment continues to contribute steady 65% in our overall revenue. We have taken 2%-6% price rise in January and February against standard dealer price list across a range of products to test the channel and consumer reaction. Coming to Birla Pivot, the B2B e-commerce business crossed the INR 8,500 crores annualized revenue run rate, ARR mark, and remains on track to surpass the annual revenue of INR 8,500 crores, way ahead of FY 2027 guidance. In a country as dynamic and fast-growing as India, the next great leap in commerce won't come from building another marketplace. It will come from digitizing and organizing B2B procurement at a scale and complexity few have ever dared to tackle.
That's exactly what Birla Pivot is doing, and we are taking one of the largest, most fragmented, operationally intense spaces in the economy and turning it into a trusted, tech-enabled, outcome-driven platform. Our vision is bold and unambiguous: to become the most trusted B2B e-commerce platform in India, and we're building it the right way by scaling a powerful buyer-seller network and compounding our advantage across the three pillars that truly matters in e-commerce: price, assortment, and experience. Let's start with price, because in B2B, pricing isn't only about competitive parity, it's about removing friction from the system. India's raw materials ecosystem is full of inefficiencies, discovery gaps, opaque comparisons, fragmented sourcing, and complex multi-vendor procurement. Birla Pivot doesn't merely negotiate price, we reengineer the economics of procurement.
We align suppliers' inefficiencies with buyers' needs, enabling transparent discovery and comparisons, helping suppliers reach demand more efficiently, and absorbing the operational complexity of procurement at scale. In other words, we convert fragmentation into efficiency, and we pass that value back to consumers. On assortment, this is where Birla Pivot is fundamentally changing how business and individuals buy project materials. We are building a true one-stop procurement engine, 35+ categories, 40,000+ SKUs, and solution aggregated, aggregated from 300+ top brands. The product category is covering everything from steel to tiles, cement to chemicals. This breadth isn't just impressive, it's transformational.
It consolidates vendors, compresses procurement cycles, standardizes buying decisions, and streamlines approvals and purchase planning... We're going to step further because in B2B, the ability to buy is often tied to working capital, and that's why Birla Pivot is enabling fast, easy, customized financing designed around real procurement needs, so businesses can purchase with confidence, flexibility, and speed. And then comes our biggest differentiator, experience. Because B2B is not just digital, it's physical, operational, and relentlessly service-driven. Birla Pivot delivers B2C-like simplicity in a B2B world, powered by digital tools for order enablement and fulfillment, nationwide support backbone, and consistent, trusted buyer experience. We are not simply building a website, we're building a reliability at scale. We are making complex procurement feel effortless, dependable, and repeatable. That's the moment when a platform stops being a channel and becomes a habit. This momentum is not episodic, it's network-led, value-led, and scalable.
As categories expand, network effects deepen, and digital adoption accelerates, Birla Pivot is uniquely positioned to play a defining role in shaping and leading India's B2B procurement digitization growth story. This isn't just about growth; it's creation of a new infrastructure layer for Indian commerce. Moving on from new businesses and focusing on macros, India continues to stand out on a global growth map. India's domestic demand is resilient, investment cycle strength, and policy support have kept growth momentum intact. The most recent Union Budget reinforced this momentum with several strategic themes. First theme is government's continued focus on infrastructure, housing, and urban development would drive growth for Grasim's cement business. India's push towards self-reliant manufacturing scale and global supply chain integration would drive growth for our chemicals business.
The recent GST rationalization focus on improving India's per capita, driven by higher disposable incomes, better quality housing, and aspirational consumption, would drive growth for decorative paints and premium textiles. Support for MSMEs by increasing finance, democratization, and integration, integrating into organized supply chains would drive growth for Birla, Aditya Birla Capital, and Birla Pivot. Lastly, a balanced focus on renewable energy and energy security will drive growth for our renewable and insulator business. For investors seeking a single scalable entry into India's structural growth, Grasim represent a credible and well-diversified proxy. As India's growth story unfolds through these diverse themes, Grasim businesses remain deeply interlinked with each of these structural pillars, presenting long runway of growth and value creation.
Reflecting on this growth, I'm happy to share that Grasim consolidated revenue for the current quarter stood highest at INR 44,312 crore, an impressive improvement by 25% year-on-year, with building materials, financial services, cellulose fibers, chemicals, and even premium textiles and insulators firing on all cylinders. The nine-month revenue stood at INR 124,330 crore, up 19% year-on-year, demonstrating consistency of performance. Stand-alone revenue grew at even faster rate, reaching highest ever at INR 10,432 crore, up by 28% year-on-year, with strong contribution from both core and new businesses. I would now like to hand over the call to Hemant, the CFO, to further discuss financials and key business highlights of other businesses.
Thank you, sir. Good morning, everyone. It's my pleasure to interact with you all again. Happy 2026 to all present on this call. I am very proud to say that we have closed the calendar year 2025 on a high note, with two of our new businesses on track to achieve their stated goals. As on 31 December 2025, the TTM consolidated revenue is nearly INR 1,70,000 crore, growth of 14% compared to FY 2025 revenue. Currently, standalone revenue on TTM basis stands at 38,191 crore, up 21% compared to FY 2025. Based on the current quarter revenue, standalone businesses are now at annualized run, revenue run rate of higher than INR 40,000 crore. There has been a strong underlying growth across all the businesses.
Consolidated EBITDA grew by 33% year-on-year to INR 6,215 crore. Stand-alone EBITDA grew at a faster pace, with growth of 57% year-on-year to INR 585 crore. Starting with key business, building material. Revenue for the segment grew by 30% year-on-year, driven by all-round performance across cement, paints, and B2B. Led by the sector's strong outlook, UltraTech is steadily expanding both size and scale. UltraTech's clear vision and disciplined action, execution have led current capacity to reach 194.06 million metric tons, with clear sight of reaching a capacity of 240.8 million metric tons by March 2028, which is a CAGR of more than 10%. The capacity expansion is clear from, critical from three or four perspectives.
Firstly, it reinforces our role as a key enabler of India's infrastructure and development journey. Secondly, it enable us to grow ahead of industry curve. Third, it narrows demand and supply gap across critical markets nationwide. And lastly, it further strengthens UltraTech leadership position. While capacity expansion remains core to our growth, we have embedded a culture of efficiency to ensure that our growth is resilient, sustainable, and cost effective. Underpinning this strength is our EBITDA growth, which grew by 29% year-on-year, with a EBITDA per ton of INR 1,051. Our MD has already covered paints and B2B e-commerce business, hence, let me now directly come to our core businesses of cellulose fiber and chemicals. Highlight for these core businesses is that while we can keep on discussing them individually, irrespective of commodity cycles, both the businesses combined have delivered consistent EBITDA.
Leadership, innovation, sustainability, capital allocation, and cost effectiveness are key tenet to such consistency, which are an integral part of Grasim's growth strategy. Starting with cellulose fiber, the business had delivered EBITDA of INR 491 crore, growth of 48% year-on-year. This is driven by three factors: First, improved realization due to favorable product mix led by exports. Second, operational efficiency due to volume growth. Third, declining input prices, mainly pulp and caustic. The demand for cellulose fiber in China continues to exhibit stability due to global tightness in supply. In India, we have seen similar strength despite removal of Quality Control Order. Due to this inherent strength, we have seen prices for cellulose fiber decoupling with other competing fibers, which are on a declining trend over the past few quarters. Unlike cellulosic fiber, which are largely stable, have started to recover.
Cellulosic fiber segment also includes cellulosic fashion yarn business. The business performance for the quarter was subdued due to cheaper imports from China, which has created oversupply and lower downstream demand. Secondly, chemical business. The revenue growth of 5% year-on-year was largely driven by volume. Caustic soda sales volume for the Quarter Three FY 2026 stood at highest ever 313,000 tons, up by 4% year-on-year. While CFR SEA prices are down on YoY basis, domestic caustic prices are showing some resilience, led by stable demand and rupee appreciation. EBITDA in chemical business was lower by 4% year-on-year due to higher ECU realization and lower profitability in specialty chemical business. Higher ECH price resulted in lower profitability in specialty chemical business, which was partially offset by lower BPA prices.
Coming back to the consolidated business, in the financial services, it is one of the fastest growing businesses in our portfolio. This is driven by their multi-channel approach, aimed at providing customer with seamless experience across channels of interaction. The revenue was up by 29% year-on-year, led by all-round performance across lending, asset management, insurance, and advisory services business. Total lending portfolio, which includes NBFC and Housing Finance, grew by 30% year-on-year to over INR 190,000 crore. On a strategic front, we would like to highlight the recent announced partnership with Advent International, which also marks an important milestone for Aditya Birla Capital.
During the quarter, Aditya Birla Capital Board approved a primary capital infusion of INR 2,750 crore into Aditya Birla Housing Finance, valuing the business at approximately INR 19,250 crore on a pre-money basis. Advent International will hold roughly 14.3% of Housing Finance, with Aditya Birla Capital retaining about 85.7%, subject to customary shareholder and regulatory approvals. In other businesses, starting with renewables business, Aditya Birla Renewables grew by 82% year-over-year, largely led by higher capacities, which now stands at nearly 2 GW peak capacity, compared to 1.2 GW Quarter Three FY 2025. Aditya Birla Renewables has announced a strategic investment by Global Infrastructure Partners, which is a part of BlackRock. This deal marks one of the largest primary private equity commitment into an Indian renewable company.
GIP will invest up to INR 3,000 crore, comprising of an initial INR 2,000 crore commitment with a greenshoe option of INR 1,000 crore, subject to customary regulatory and closing conditions. Post this deal, the renewable business is valued at an EV of INR 14,600 crore. I'm happy to say that this partnership is expected to escalate Aditya Birla Renewables' growth trajectory as it builds on its operational and contracted capacity of nearly 4.3 GW of peak capacity portfolio across solar, hybrid, floating solar, and RTC assets, and targeting scaling capacity beyond 10 GW of peak capacity in coming years. This transition brings not only capital, but also GIP's global infrastructure operating experience to support disciplined expansion and contribute meaningfully to India's energy transition goal.
As regards CapEx, post commissioning of Kharagpur plant, we have completed majority of the plant expenditure, capital expenditure in decorative paint business. The capital expenditure spent on YTD basis is INR 1,310 crore. Focus now remains on phase one of greenfield lyocell project for additional 55,000 metric tons per annum capacity of specialty fibers. As on thirty-first December 2025, net debt of the company is lower at INR 6,882 crore compared to INR 8,277 crore in the same period last year, with net debt to EBITDA at 2.1 level. Let me now open the floor for Q&A.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Navin Sahadeo with ICICI Securities. Please go ahead.
Yeah, good morning, sir. I hope I'm audible.
Yes, yes.
Yeah. So thank you for the, thank you for the opportunity, and, also thank you for the, detailed, initial comments. Two questions. First, of course, on the paints business. So, needless to say, the company has done a commendable job. I believe for the quarter, the revenues given, like, you know, INR 8,500 crore run rate for the Birla Pivot and, numbers that are published for UltraTech, our sense is, paints would have done roughly INR 1,200 crore kind of revenue, in this particular quarter, which of course, is great from the start that we have had. My question is, the growth is seen maturing.
In the sense, in Q1, a similar sort of a very rough cut working suggested 1,100 kind of a growth in the June quarter, similar flattish in September, and now we are at, twelve hundred, give or take, some margins there, I mean, some buffer there. Now, to reach the scale of INR 10,000 crore exit by Q4 2028, which is a run rate, I mean, which is around INR 2,500 crore revenue, over the next 9 quarters, we need to grow at 40% CAGR year-on-year, for us. So I'm just trying to understand, first of all, what different then now the company, will do, or what convinces us now, given that the growth is maturing in the last one, two quarters, how should one look at this target realistically being achieved?
In that, what is also the industry value growth into consideration? That's my first question.
Okay. Thank you, Navin. So while you have done your internal calculations, I'm not going to either accept or deny it, but all I can say, both on quarter-on-quarter basis, we had a robust more than double digits levels of growth, closer to between 18%-20% on a quarter-on-quarter basis. On an annualized basis, these numbers are tending towards the three-digit growth. So I don't know what numbers you have in your calculations and using words called mature, when we have grown on a year-on-year basis by 300 basis points in the paint industry, and we see a similar kind of consumer uptake in the current quarter.
On an overall basis, we are seeing across geographies a very strong demand for Birla paints, and a large number of existing dealers who have joined us have increased their throughput, and they continue to grow at levels of strong single-digit on a quarter-on-quarter basis. And we continue to add new dealers at a double-digit level on a quarter-on-quarter basis, and our on H1 and H1 half-yearly on half-yearly basis. So that is the part one. Second part, which is besides consumer and dealer, we're also getting very good attraction from the contractors.
As I mentioned in my opening speech, more than 7.5 lakh contractors have joined hands, and these volume, this number of contractors give us confidence that the growth will continue. We are still a single-digit market share player. We have a large capacity. Our presence is now on a pan-India basis. We've reached every 50,000 population town. We are reached more than 75% of 10,000 to 50,000 population town. So the growths are happening. We have a large portfolio of businesses. Consumer demand is building up, and we remain confident and remain, we continue to guide that we will deliver the INR 10,000 crore in the third year, in third full year of operation.
...Understood. So despite the price increase that we have taken, as you said, across 2%-6%, despite that, you are saying we are confident to achieve the revenue target?
So you should understand the philosophy of price increase. We always want to maintain a particular distance from the market leader, and we felt the distance was slightly more than what that was necessary, and we're bridging that gap. That is the objective of price increase, and there is no other objective. And we also want to test at what demand of consumer and contractor remains at the revised price. This is our first-
Yeah, go ahead, please.
No, that's fine. That's it.
Okay. Okay. Thank you. My second question then was on your Birla Pivot business and of course, extremely fast execution, much, much ahead of expectation. But we had also, I think, hinted the first time we gave this target, the road to profitability or breakeven for this business was also, like, you know, a billion-dollar kind of revenue run rate. So is it now fair that since we have achieved almost we are there, this business is breaking even or will start making positive contribution? How should one look at profitability for Birla Pivot from now going ahead? Thank you. These are my questions.
Thanks, Navin. This is Sandeep here. On the, you know, on the profitability front, you know, we are making progress similar to how we have done, you know, how we have executed on the revenue side, and the growth has been, you know, excellent over the last few quarters. We've been making good progress on, bridging the gap so that we can get to breakeven as well. I think from our current estimates, we will exit FY 2027 at a breakeven level. That is our current estimate.
Thank you.
Thank you. Next question comes from the line of Rahul Gupta with Morgan Stanley. Please go ahead.
Hi, thank you for taking my questions. So two questions, one, continuing on the Pivot, point. I remember earlier you had guided to break cash breakeven by 2030. So you are now front loading it, accelerating it to fiscal 2027 end, right?
Rahul, I don't think we gave the guidance of 2030 earlier, but, you know, as I mentioned, in response to the earlier question, you know, FY 2027 exit, we should be exiting the year, at breakeven, yes.
Okay, that's great. My second question is, on the continuation of the points you made, a point you made on the paints. You are testing waters with 2%-6% hikes in January. Now, it's early days. Can you please help us understand how the acceptance has been? And, if you look at the industry, which has been struggling with discounting, how should we look at the overall industry from here on? Or, let me put it this way: how volume versus value gap should move over the next year, for industry and you? Thank you.
So, first and foremost, as I mentioned in the previous answer, there was the gap between the leader and us was high, and we've used this price increase primarily to be able to bridge the gap. We obviously still are a single-digit player, and our aim is to bridge the gap between our capacity, which is at 24%, to our current revenue market share. So that is part one. It's early time to be able to say what is the response to the price increase, because we've had a certain of a range of products where we took price increase on 28th of January, and the remaining range of products is happening on 25th of February.
So it'd be better I respond to the, consumer and contractor response, after the, after the Quarter Four results are there, because we are still in the process of, executing the price increase. But, on a, a mid to long-term basis, what is our view about the industry? We remain very bullish. If there has been, as I mentioned, in my opening speech, the industry in Quarter Three has grown by 10%-11%, or probably even 12% by volume. The challenges have been, over-focus on, economy, sub-economy, and, putty, based business. So if we stop the downtrading, and if you notice, Birla Opus, wants to create a bit more balanced approach.
It is making every effort to premiumize the service with the launch of its gallery paint galleries, and where obviously, the ratio of premium and luxury is significantly higher, and same is true for our painting services. We've been making every effort to premiumize and ensure that in the mix, our rate realization remains as at a similar levels to the volume. And our attempt is volume and value to both move in tandem. As far as industry is concerned, we believe that this year, the industry may, including Birla Opus, may grow by 5%-6%. FY 2025, it has grown by almost nil. And FY 2027, we are hopeful that it will come back to 8%-10% growth levels.
Great. Thank you so much. Wish you all the best.
Thank you. Next question comes from the line of Nirav Jimudia with Anvil Wealth. Please go ahead.
Yeah, sir, thanks for the opportunity. Sir, just one question on the chemical side. So for the epoxy business, just wanted to have your thoughts, A, with the trade deal done with the USA now, and Chinese currency also appreciating by close to around 8%-9%, how do we see our exports to the USA market in the medium term? And on a longer term basis, with now EU FTA also in place, how do we see our volumes in terms of exports to that region as well?
Thanks, Nirav. Hi, thanks for your question. Can you hear me?
Yeah, yeah, sir. Loud and clear.
Look, both, both are positive for us in a way. So as you know that, in epoxy, particularly in liquid epoxy resins, the Koreans have been available in India due to their FTA. You know, they get a certain advantage where they can bring in product without the, without the duty. And also, you know, they had preferential access to, to U.S. as well as Europe. Now, clearly, that, advantage is going to go away. If you look in terms of timing, then, the U.S. deal probably will get actioned before the American deal. So I am seeing a positive upside on, export of, epoxy from India, to the U.S.
Now, how much quantity that will be, how that will ramp up, et cetera, is a matter of, you know, individual customer qualifications and, and those kind of things. You know, that's a little bit too much detail to get into right now. But we do see a positive impact on that side. Similarly, if you look at Europe, as you know very well, Nirav, the European chemical industry is struggling with high costs, both from perspective of energy, but also from perspective of extremely high labor costs. As you know, a lot of restructuring has been announced in Europe. You know equally that Westlake has stopped operations on their Rotterdam side.
I think the India-Europe FTA, in the longer term, will have a much more significant impact on the Indian chemical industry, probably, in my personal opinion, more than the U.S. Of course, the speed at which Europe will ratify, all this will get down into law, et cetera, will be a little bit slower, but I believe that will be more sticky. So both these agreements, Nirav, are, I think, positive for the industry.
Got it, sir.
Including-
Yeah. So just two clarifications here, sir. A, do we import any raw material from EU, which were earlier subject to taxes, and now with this deal, could help us from the chemical business point of view also and from an overall business point of view also? And, B, any volume guidance which you would like to share from the epoxy business point of view for FY 2027? Thank you so much.
Yeah. So if I look at, imports from Europe, yes, we have some. I would not like to get into the details of what that is, but those are like, you know... They are not a large part of our basket, so I don't see really a large benefit from that. What I may think of is, you know, if glycerin prices continue to remain high, then the propylene route to ECH has its own competitive advantage, right? And several of the propylene-based producers are Western-based. But there is a logistic cost hurdle, so let's see how this plays out in the long term.
If you look at, volume growth, then if I look year-on-year, our overall, you know, epoxy business, liquid epoxy plus formulations, this year has grown, or at least, you know, for the year-over-year, we have grown by about, 6%. I expect this rate to ramp up next year. Now, how much it will ramp up by is a matter of, matter of speculation, but I expect that rate to ramp up further.
Got it. Is it safe to-
None of the fundamentals have changed.
Safe to assume that this ECH price corrections, which will happen on the upside, would translate into a similar increase in the prices of epoxy, which generally gets passed on a lag basis?
Yeah, that. There is usually a time lag associated with that. As I mentioned, in the epoxy value chain, there are competing routes, right? Glycerin-based ECH and propylene-based ECH. So what may be a pass-through for me may not necessarily be a pass-through for somebody else.
Okay.
Maybe, you know, globally, who may be propylene integrated. So depending on where crude prices, propylene prices, glycerin prices, the pass-through mechanism has a different, cyclicality. But in the longer term, it all always passes on, right? It's always a matter of time, but the exact speed by which it passes on depends upon these three, four factors.
Sir, last clarification, if you allow. This quarter, we have seen a dip in our epoxy revenues. So was it more because of the volumes were lesser this quarter, and that should start correcting next quarter onwards? Is this a right assumption to make?
So just let me quickly check the data. Yes, so volumes were slightly under pressure on the liquid epoxy resin side. Actually, maybe the better way to see it is, you know, we decided not to take certain volumes, where we thought the margin was getting too squeezed. That's probably the better way to see it.
If I look at the non-LER business, you know, all the formulations, specialties. So the specialties within the specialties, there actually we have not had any volume issue. It's on the margin where perhaps the lowest profitable part of our LER business, we have been a little bit, you know, unwilling to allow our margins to get compressed too much.
Thank you. Mr. Jimudia, please rejoin the queue for more questions. Next question comes from the line of Amit Purohit with Elara. Please go ahead.
Yeah, hi, thanks for the opportunity and thanks for the detailed data points on the paint. Just to recheck, sir, on the overall paint that we sold, we talked about 500 billion milliliters. That was since the time we have been into the market, right? It's a cumulative or did I hear this correctly?
500 million liters, not 500 million milliliters.
Okay, got it. That is since the time we have started operations, is that? Yeah. Okay. And, secondly, sir, also wanted to understand, when you talked about 300 bps lower than the second player, that includes putty and everything, right, at this point of time? Market share, exit market share you were talking about or, how do you-
I'm again saying what we said in the statement, opening remark, Birla White, plus Birla Opus revenue for quarter three, and guidance given by number two player. In our assessment, in terms of estimates, then now the gap is 300 basis points. I hope it's clear. It is only Birla White's putty business. It does not include any of, any other business.
Sure, sure. And, sir, you talked about increase in new dealer addition. I just wanted to understand the typical profile of these dealers. If you could just qualitatively highlight for these are, these are large dealers or, or these are dealers largely from the market leaders, or, if you could just sort of some highlight, because typically, I mean, there is different types of dealers, and initially, when we started off, obviously there were challenges to reach out to the very, very large dealers. What is the state now, I mean, in terms of acceptance?
We are getting a blend from all category of dealers. In our internal assessment, we broke the dealers into A category, which are more than INR 3 crores; B category, which is INR 1 crore to INR 3 crores; C category, which is INR 30 lakhs to INR 1 crore; and D category into less than INR 30 lakhs. Most of the dealers are coming in in the A, B, C. The small numbers also come in the D category, but our focus in the A, B, C category.
Yeah. Lastly, the price increase that we highlighted, that is more from a testing perspective or is there any raw material pressure which kind of, or do you think that from now on, the brand is strong enough to kind of take pricing, and still it adds value to the entire channel as well? Just wanted to know your outlook for as you highlighted that next year, FY 2027, the growth in the industry could be closer to about 8%. So the pricing volume perhaps should it reduce in the FY 2027? That's the last question from my side.
First and foremost, there are no current raw material pressures. Second, we've been consistent in maintaining that we are at a lower price than the market leader, and we felt the gap was higher, and we reduced the gap. That has been the strategy around it. It is not a price increase strategy per se, as you're reading it. Please read it, that we would like to maintain a certain gap with market leader, and that's and we want to test at that gap, what is the consumer response? There was an X gap that existed, and we reduced that gap.
Sure. Thanks a lot, sir. Thank you.
Thank you. Next question comes from the line of Pathanjali Srinivasan Pathanja with Sundaram Mutual Funds. Please go ahead.
Hello, ama-
Mr. Pathanja, please go ahead.
Yeah. Thank you for the opportunity. A couple of questions. So firstly, could you explain a bit on our share of retail business and institutional business? Because I believe we've grown pretty fast in our institutional business, but I was just trying to figure out if the base there is lower or are we tilted more towards institutional business?
Okay. So, to our understanding, the industry, retail and institutional business mix is 85-15. We are not yet there on that mix. We are still a single digit on the institutional business. Retail is, much, faster to take off, and institutional is has a much longer, gestation period. The message that I was communicating is that we have a strong pipeline, and, over, by hopefully, by FY 2027, we should be able to come closer to the industry average between 12%-15% on overall contribution from institutional business.
Could you give me some numbers, sir, where we are in terms of range here?
As I explained, we were a single digit number, and we are. We have a strong pipeline of institutional, but retail continues to be the stronger focus for us at this point of time. But institutional is going faster.
Sure. And just, one more question around. So this, number of, saying that 18% you've grown last quarter and all of that, there's just one part, though, where I've not been able to figure out. Like, when I met a couple of dealers from the time we started and more recently, and, I have seen some of them saying that, they've either, stopped doing business or they're finding it difficult or something like that. While my sample size is very small, I want to know, like, what is an acceptable level of, pushback or, a reduction in dealers when we expand dealership, and what are our targets here and where are we here?
So, it's a large dealer universe. There are over 100,000 dealers. On an average in a quarter, about 50%-60% of the dealers are active. We are also experiencing a similar levels. In fact, our sense is about 70%-75% in a quarter are active around there. And we are satisfied with the number of people who onboarded with us, with the number of people who are active in a given quarter. So, from that perspective, we are very satisfied both in the expansion pace of dealers both in the existing towns and new towns, as well as the throughput pace of improvement of dealers.
We are most of the dealers who have joined us and have been consistent in marketing have continued to stay with us. Okay? There's obviously... We are very focused on our collection, and there are dealers who are pay masters, are the ones probably you may be referring to.
Got it, sir. Just to continue on that, I just wanted to know what is our policy with tinting machines that we've given to dealers, and where dealers have not been doing as much business as we like to them, how are we dealing with them? And, have we started collecting money for tinting machines that we've given to dealers?
No, we don't collect money for, as we already explained, we give the dealers free of charge tinting machines, and that remains a consistent policy, even in April 2026 and going forward. Only if a dealer does default on his payment for a long period of time, are there any actions that are necessary, but it is few and far, and probably not relevant for this national platform.
Thank you. Mr. Pathanja, please rejoin the queue for more questions. Next question comes from the line of Prateek Kumar with Jefferies. Please go ahead.
Yeah, good afternoon, sir. My question is on paints. Can you just confirm again, the while you talked about your revenue expectation, maintaining for FY 2028, on what are, what do you think on profitability? Other related question, you have, like, seen some increase in interest expense, during the quarter, if we can see. And depreciation, is this completely related to capitalization of sixth plant, or also if there are any working capital changes which you expect because you're also increasing city mix in your paint business? Thank you.
I just want to be clear with what your question is. You are referring to overall Grasim results, and you're saying that the interest and depreciation component gone up. Is that what you're referring to?
Yeah, that is right.
Okay.
Yeah. So in Grasim, if you are referring with the last year, the borrowing for the-
Q-on-Q, I meant. Setting up the new plants was being capitalized. In the October 15th, we have commissioned our last sixth plant, and now from next quarter onwards, there will be no capitalization, and all the interest costs will be coming to P&L account. Is this answers your query?
Yeah, sure. So there's no material working capital changes because we're shifting business, paint segment business to more institution that doesn't have no implication-
Sorry for interrupting. Mr. Kumar, your voice is breaking. Can you just, come a little closer to the mic and speak?
In paints business, we have capitalized over all the six plants, and no major CapEx is pending now.
If your question is on debtors, we are well in control of our debtors, and working capital is not a challenge. We repeat again, that the interest component in the past, a portion of that was getting capitalized, and now it, it will not, the portion is significantly fallen, because from six plants now down to, in around fifteenth October, it's only one plant, and that also, a part of it was, no more capitalized. And the same applies to depreciation. As now all the six plants have, are fully commissioned, their full depreciation is reflecting in the books.
Thank you. The other question was on paint segment profitability, which you're expecting for FY 2028. You maintain it as like earning positive by FY 2028?
Yes. We, we maintain our guidance. I repeat, within three years of full-scale operation, we will, we are targeting to be able to reach, a profitable number two position.
Thank you and all the best.
Thank you. Next question comes on the line of Shreya Banthia with Oaklane C apital Management LLP. Please go ahead.
Yeah, thanks for the watch. My question is-
Yes, Banthia. Yep.
Am I audible?
Yes, you are. Please go ahead.
Yeah. So my question is regarding the chemical segment. If you could share, what is the current share of renewable energy in the chemical segment?
Just a second. It is around, exit rate is around 20%-23% right now.
Thank you.
We expect, we actually are targeting to reach an exit rate of over 40% by end of FY 2027, if you want to make a projection.
Thank you very much. That was my question.
Thank you. Next question comes on the line of Vipul Kumar Anupchand with Sumangal Investments. Please go ahead.
Hi. Thanks for the opportunity, sir. So when we will start sharing the revenue and EBITDA numbers of our paint business?
Shortly.
Shortly means, sir?
Yes. Yeah, we are even today, because that's why the, there was, there is portion of the material that has been produced and was not sold, and they are still reflecting revenues, which are getting capitalized. We expecting to complete that, and we will move on to this. We will share with you the exact date, dates when we do that. But there is still... And so that's why this, this gap between capitalization, that's why the numbers, what market calculates, is there is a gap, and we want to finish all the material that we have produced before commissioning and consume it, which remains in the capitalization.
Should we assume that from next financial year, you will start sharing those numbers, sir?
We will, we'll definitely come back.
Okay. Thank you.
Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. We have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you so much for participating on the Grasim call. We're now going to close the call. Thank you.
Thank you.
Thank you. On behalf of Grasim Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.