Grasim Industries Limited announced its Financial Results for the quarter and year ended 31st March 2023. Consolidated revenue for FY23 crossed a historic milestone of ₹1 Lakh Cr. reaching ₹1,17,627 Cr. Revenue is up by 23% YoY driven by the strong underlying performance of standalone businesses coupled with the robust performance of its key subsidiaries: UltraTech Cement, Aditya Birla Capital and Aditya Birla Renewables.

For Q4FY23, the Company’s consolidated revenue stood at its highest levels of Rs. 33,462 Cr., reflecting a growth of 16% YoY mainly contributed by the strong performance of key subsidiaries. Consolidated EBITDA for the quarter grew by 5% YoY to ₹4,873 Cr. Consolidated comparable PAT from continuing operations during the quarter stood at ₹1,369 Cr. compared to ₹1,419 Cr. in Q4 last year (adjusted for tax write-backs & other one-off items). Standalone PAT for the quarter was impacted by the softening of realisations in the Chemicals business compared to the elevated levels of Q4 last year and continued global weakness in the VSF business.

Grasim has embarked on a transformational growth phase by incubating new, high-growth businesses. This journey is being facilitated by investment from our stable and sustainable standalone businesses with strong cash flows. FY23 has seen several milestones in this journey, and the company aims to sustain this momentum through long term focus on value maximization.

Viscose Business

Globally, the Viscose Staple Fibre (VSF) industry witnessed a sharp recovery in Q4FY23 following an exceptionally subdued environment in Q3FY23. The reopening of the Chinese markets has aided the overall pickup of demand. China VSF average operating rates increased to 69% for Q4FY23 compared to 66% in Q3FY23 with an exit at 80%. The increase in demand has reduced the average inventory levels to an average of 23 days, down from a peak of 27 days in Q3FY23. VSF prices improved to $1.68/kg (March’23) compared to $1.53/kg (December’22) due to market improvement. Although raw material prices and energy costs remained elevated, they showed a declining trend.

The Company’s sales volume of VSF increased by 25% on a QoQ basis to 192KT for Q4FY23. Viscose business revenue increased to ₹3,764 Cr. an 18% jump from Q3FY23. The VSF EBITDA turned positive in Q4FY23 and VFY margins have improved on the back of better realisations and lower raw materials prices. Overall Viscose EBITDA stood at ₹144 Cr. (up 127% QoQ) as compared to ₹63 Cr. in Q3FY23.

Chemicals Business

The global Caustic Soda market remain oversupplied with flat demand. Average quarterly spot prices (CFR SEA) for caustic were lower by 25% QoQ to $518/ton compared to $694/ton in Q3FY23.

Chlor-Alkali (Caustic soda) sales volumes were up 5% YoY and 1% QoQ to 286KT in Q4FY23. Chlorine Integration stood at 58% for this quarter compared to 60% in Q3FY23, due to a temporary shutdown of the Phosphoric Acid plant, which restarted operations in April’23. Overall chlorine integration for FY23 improved to 60% compared to 58% in FY22. The revenue contribution of chlorine derivatives in the Chemicals business increased to 18% in Q4FY23 compared to 16% in Q4FY22. The Speciality Chemicals (Epoxy Polymers and Curing Agents) business saw normalisation of realisations. However, the demand momentum remains strong in the wind energy sector. The contribution of speciality chemicals improved with the softening of raw material prices.

The revenue for the Chemicals Business was at Rs. 2,397 crore. down 7% QoQ and EBITDA stood at Rs. 368 crore. down 25% QoQ as the ECU was sequentially down by 10% to Rs. 42,136 Per MT. For FY23 the revenue contribution stood at 17% and 23% for Chlorine Derivatives and Speciality Chemicals respectively.

Paints Business

The Construction activity on all six plants is on track as planned and the state-of-the-art R&D facility is fully operational. All the Business Plan activities are progressing in line with the plans, leading to the commercial launch as scheduled beginning Q4FY24 in phases.

B2B E-Commerce Business

The Go-to-Market strategy and outreach plan have been finalised. We have already on- boarded a leadership team across sales, marketing, category & operations for the full-scale launch scheduled in Q2FY24. This launch will be in a phased manner beginning with the states of Maharashtra and Madhya Pradesh.

Capex Plan

The total capex spent for FY23 stood at ₹4,307 Cr. including ₹1,979 Cr. towards the Paints Business till 31st March 2023.

Dividend

The Board of Directors of Grasim has recommended a dividend of `10 per equity share for the year ended 31st March 2023. The total outflow on account of the dividend would be `658 Cr.

Sustainability

The Company continues to focus on its sustainability initiatives. Grasim’s share of renewable energy overall increased to 8% in FY23 compared to 5% in FY22. The company has also been able to reduce the water consumption intensity by 15% YoY. The GHG emission intensity stands reduced by 6% compared to the baseline year of FY19. The Company has been honoured with the “Sustainability 100+” Leadership Award under the category “Water Stewardship”, organised by Network18.