Birla Group Increase Stake In Grasim Industries By 4.09%

Grasim Industries reported a 39% YoY growth in consolidated net profit (excluding exceptional items) to ₹1,908 crore.

Birla Group Holdings (BGHPL), the promoter of Grasim Industries has recently increased its stake in the company by 4.09%. According to an exchange filing, the transaction raises BGHPL’s stake in Grasim Industries to 23.18% from 19.10% at the end of March.

This stake increase is part of a scheme of amalgamation, wherein BGHPL acquired 2,67,46,262 fully paid-up equity shares of ₹2 each (equating to a 3.9% stake) and 10,63,204 partly paid-up equity shares of ₹0.50 each (0.16% stake) from Umang Commercial Company Private Limited. The shares transfer was completed on May 24, 2024, according to the filing.

However, even after the increase in individual shares of BGHPL, the overall holding of promoter/promoter group shares remains unchanged at 43.06%.

Shares of Grasim Industries fell marginally at ₹2440 in early trading session on NSE.

Being part of the Aditya Birla Group, Grasim Industries posted a 39% increase in consolidated profit excluding extraordinary items for the quarter ended March 2024. Net profit rose to ₹1,908 crore from ₹1,369 crore in the same quarter a year ago.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 27% year-on-year in the March quarter for the company. Caustic soda-flakes (CSF) prices in China increased slightly, indicating favorable demand conditions and a stable employment rate of 85%. However, export prices weakened due to global export surpluses and falling raw material prices. Changes in MSME policy in India during the quarter had an impact on demand, leading to lower inventories in fabric prices and challenges in. The CFY (cellulosic fiber yarn) industry has had difficulties as a result of rising imports from China in the face of low domestic demand.

On the other hand, Grasim's CSF volumes grew by 8% year-on-year to 208 KT, though the revenue for this segment remained flat at ₹3,762 crore due to subdued realisations. Sequentially, the segment's EBITDA grew by 15% to ₹462 crore, largely due to lower input costs.

Grasim's chemicals business achieved record caustic soda sales volume of 308 KT in Q4 FY24, marking an 8% YoY increase. However, the segment's revenue decreased by 13% YoY to ₹2,083 crore, driven by a sharp 28% YoY decline in ECU (Electrochemical Unit) realisation.