Grasim operating cash outflow widens to Rs 13,156.74 crore

Grasim Industries Limited reported an operating cash outflow of Rs 13,156.74 crore for the six months ended 30 September 2026, widening from Rs 8,015.08 crore a year earlier, as Rs 25,161.54 crore of financing-business loan growth and Rs 5,773.74 crore of life-insurance policyholder investments absorbed cash despite higher pre-working-capital profit.

Why did Grasim’s operating cash outflow widen?

Grasim’s operating cash outflow widened by Rs 5,141.66 crore year on year because higher lending, insurance investments, inventories and tax payments outweighed the increase in operating profit before working-capital changes. That profit rose by Rs 6,583.62 crore to Rs 20,728.48 crore in the six months ended 30 September 2026, from Rs 14,144.86 crore in the corresponding 2025 period.

Loans of the financing business were the largest cash use at Rs 25,161.54 crore, compared with Rs 16,871.77 crore a year earlier. The Rs 8,289.77 crore increase in lending-related cash absorption exceeded the increase in operating profit before working-capital changes. Life-insurance policyholder investments used Rs 5,773.74 crore, up from Rs 1,833.62 crore, while inventories used Rs 2,629.89 crore, against Rs 703.13 crore in the prior-year period.

Income taxes paid, net of refunds, rose to Rs 1,986.67 crore from Rs 640.96 crore. Trade payables, other liabilities and provisions generated Rs 1,384.37 crore of cash in the 2026 period, compared with a Rs 680.11 crore cash use a year earlier, but this inflow did not offset the expansion in financing-business loans and insurance investments.

How did Grasim fund operating and investing cash use?

Grasim funded its operating and investing cash use through Rs 25,804.25 crore of financing cash inflow during the six months ended 30 September 2026, up from Rs 15,377.36 crore a year earlier. Operating activities used Rs 13,156.74 crore and investing activities used Rs 10,819.97 crore, resulting in a Rs 1,827.54 crore increase in cash and cash equivalents before foreign-exchange effects.

Non-current borrowings generated Rs 35,009.34 crore, while repayments used Rs 16,148.93 crore, leaving net proceeds of Rs 18,860.41 crore. Grasim also reported Rs 7,345.67 crore of net current-borrowing proceeds, against Rs 2,663.75 crore in the previous six months. Shares issued by subsidiaries generated Rs 1,127.73 crore, compulsorily convertible preference shares generated Rs 1,590 crore and minority shareholders invested Rs 3,191.36 crore in subsidiaries.

Investment cash use rose by Rs 3,319.10 crore from the prior-year period. Purchases of property, plant and equipment and other intangible assets amounted to Rs 9,184.79 crore, compared with Rs 7,539.96 crore. The investing cash-flow statement also recorded Rs 2,904.14 crore of net cash used for current life-insurance investments and shareholder investments, versus Rs 467.51 crore a year earlier.

Cash and cash equivalents stood at Rs 4,628.99 crore on 30 September 2026, up from Rs 2,797.89 crore on 31 March 2026. The cash-flow statement records a Rs 3.56 crore effect of exchange-rate movements on consolidation, taking the period’s reported cash increase to Rs 1,831.10 crore. The closing balance remained below Rs 4,745.89 crore at 30 September 2025.

Which assets increased during the six months?

Grasim’s total assets increased by Rs 47,024.99 crore to Rs 616,577 crore at 30 September 2026 from Rs 569,552.01 crore at 31 March 2026. Non-current loans rose by Rs 14,316.78 crore to Rs 164,817.97 crore, while current loans rose by Rs 10,004.41 crore to Rs 53,946.20 crore.

Combined current and non-current loans therefore increased by Rs 24,321.19 crore to Rs 218,764.17 crore. This balance-sheet movement was close to the Rs 25,161.54 crore cash use for financing-business loans shown in operating cash flow, although Grasim did not provide a reconciliation between the cash-flow line and closing loan balances.

Non-current investments of the insurance business increased by Rs 7,092.48 crore to Rs 74,937.60 crore. Current insurance investments fell by Rs 371.28 crore to Rs 1,874.15 crore. Assets held to cover linked liabilities of the life-insurance business declined by Rs 6,326.58 crore across current and non-current categories, to Rs 33,636.78 crore at 30 September 2026 from Rs 39,963.36 crore at 31 March 2026.

Property, plant and equipment increased by Rs 4,703.73 crore to Rs 116,806.71 crore, while capital work-in-progress rose by Rs 454.70 crore to Rs 16,331.40 crore. Inventories increased by Rs 2,633.19 crore to Rs 18,061.75 crore, broadly matching the Rs 2,629.89 crore inventory-related operating cash use.

How did Grasim’s borrowings and reported ratios change?

Grasim’s combined current and non-current borrowings increased by Rs 28,200.77 crore to Rs 253,148.59 crore at 30 September 2026. Non-current borrowings rose to Rs 168,732.36 crore from Rs 156,828.62 crore at 31 March 2026, while current borrowings increased to Rs 84,416.23 crore from Rs 68,119.20 crore.

Total equity increased by Rs 7,534 crore to Rs 177,396.70 crore. This comprised Rs 107,040.28 crore of equity attributable to Grasim’s owners and Rs 70,356.42 crore of non-controlling interest. Non-current policyholder liabilities increased by Rs 8,926.63 crore to Rs 114,910.04 crore, while current policyholder liabilities rose by Rs 184.43 crore to Rs 1,578.58 crore.

The debt-equity ratio reported by Grasim was 1.43 times for the six months ended 30 September 2026, compared with 1.25 times in the corresponding 2025 period and 1.32 times for the year ended 31 March 2026. Total debt to total assets was 0.41 times, compared with 0.38 times a year earlier and 0.39 times at the March 2026 year-end.

Grasim reported a current ratio of 2.32 times at 30 September 2026, against 2.20 times at 31 March 2026. Its ratio disclosures define current liabilities excluding current borrowings and liabilities of assets held for sale, while total equity in the debt-equity calculation includes non-controlling interest.

Conclusion

Grasim’s higher operating profit before working-capital changes did not translate into operating cash generation in the six months ended 30 September 2026. Financing-business lending, life-insurance policyholder investments, inventories and taxes produced a Rs 13,156.74 crore operating outflow, while increased borrowings and equity-related financing supplied the cash needed for operating and investing requirements.

The next disclosed funding matter to watch is Aditya Birla Renewables Limited’s proposed acquisition of Solenergi Power Private Limited and its subsidiaries, based on an enterprise value of about Rs 17,200 crore. Grasim said the transaction would be funded through a mix of debt and equity and remained subject to closing conditions and other approvals, with no impact included in results as at 30 September 2026.