Grasim PAT rises 187% as UltraTech dividend lifts earnings

Grasim Industries Limited reported Q2FY27 standalone profit after tax of Rs 2,306 crore, up 187% year on year, after receiving a Rs 3,968 crore UltraTech dividend that helped lift record revenue of Rs 12,747 crore and earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 4,615 crore.

Why did Grasim's standalone profit increase in Q2FY27?

Grasim's reported standalone profit after tax (PAT) rose 187% year on year to Rs 2,306 crore in Q2FY27, while adjusted PAT before exceptional items increased 289% to Rs 3,132 crore. The reported figure included an exceptional charge of Rs 825 crore for impairment or estimated exposure relating to pulp joint venture AV Group NB Inc. in Canada.

The Rs 3,968 crore UltraTech dividend received in cash was the main driver of the difference between the standalone and consolidated accounts. Management said the dividend was recognised in Grasim's standalone results but eliminated on consolidation, while favourable product mix also supported standalone EBITDA and higher input prices partly offset the gain.

Standalone revenue reached an all-time high of Rs 12,747 crore in Q2FY27, compared with Rs 9,610 crore in Q2FY26. EBITDA rose to Rs 4,615 crore from Rs 1,786 crore, and cash profit, defined by Grasim as EBITDA less interest and current tax expense, increased 151% to Rs 3,968 crore.

For H1FY27, standalone revenue was Rs 24,541 crore, up 30% year on year, while EBITDA rose 147% to Rs 5,708 crore. Adjusted PAT for the six months was Rs 3,378 crore, compared with Rs 686 crore in H1FY26, and reported PAT was Rs 2,553 crore.

Why did Grasim report a consolidated loss despite higher revenue?

Grasim reported a consolidated loss attributable to owners of Rs 234 crore in Q2FY27 despite record revenue of Rs 50,105 crore, because the UltraTech dividend was eliminated in group accounts and the results included a Rs 767 crore exceptional charge related to AV Group NB Inc. in Canada. Consolidated adjusted PAT attributable to owners before exceptional items was Rs 536 crore.

Consolidated revenue increased 26% from Rs 39,900 crore in Q2FY26, while EBITDA grew 25% from Rs 5,217 crore to Rs 6,513 crore. However, adjusted PAT attributable to owners declined 10% from Rs 595 crore, showing that the revenue and EBITDA increase did not translate into higher bottom-line profit before the exceptional charge.

On a trailing 12-month basis, Grasim said consolidated revenue was Rs 194,234 crore, 11% above FY26, and EBITDA was Rs 28,816 crore, also up 11%. Standalone operations contributed nearly 24% of consolidated revenue and EBITDA, while trailing-12-month PAT attributable to owners before exceptional items rose 13% to Rs 5,861 crore.

Which businesses drove Grasim's Q2FY27 revenue growth?

Grasim's Building Materials business was the largest disclosed Q2FY27 revenue contributor, reporting Rs 27,378 crore, up 23% year on year, followed by Cellulosic Fibres at Rs 5,344 crore, up 29%, and Chemicals at Rs 2,759 crore, up 15%. Building Materials EBITDA increased 19% to Rs 3,510 crore, led by improved cement profitability.

UltraTech's consolidated cement sales volume rose 12.9% year on year to 38.2 million tonnes in Q2FY27, while ready-mix concrete sales volume increased 23% to 4.7 million cubic metres. The cement business added 4.6 million tonnes per annum of grey-cement capacity during the quarter, taking India and overseas capacity to 210.1 million tonnes per annum.

Cellulosic Fibres EBITDA increased 49% to Rs 522 crore, aided by revenue growth and a higher specialty-fibres share. Cellulosic staple fibre sales volume grew 7% to 224 thousand tonnes, mainly through exports, while cellulosic fashion yarn volume rose 2% to 11.6 thousand tonnes amid subdued downstream demand.

Chemicals revenue grew on an 8% rise in caustic-soda sales volume to 317 thousand tonnes and performance in chlorine derivatives. Segment EBITDA nevertheless fell 11% to Rs 326 crore because of higher power costs in caustic soda and lower Specialty Chemicals profitability, which Grasim attributed to elevated inputs and softer end-user demand.

What are Grasim's growth-business targets and capital plans?

Grasim's Birla Opus paints business recorded Q2FY27 revenue of Rs 1,337 crore, up 35% year on year, and reported 20% volume growth. Birla Opus aims to cross double-digit revenue market share in the Indian organised decorative-paints market in H2FY27 and has guided for Rs 10,000 crore of revenue by the end of FY28.

Birla Pivot, Grasim's business-to-business e-commerce operation, generated Rs 2,785 crore of Q2FY27 revenue, up 66% year on year, with annualised revenue run-rate above Rs 11,000 crore. The business aims to exceed Rs 12,000 crore of revenue in FY27 and said it remains on track for EBITDA profitability in H2FY27 after one-time employee expenses affected quarterly EBITDA.

Grasim's FY27 standalone capital-expenditure budget is Rs 3,157 crore, with nearly 45% allocated to growth projects, and H1FY27 spending was Rs 1,022 crore. Its 55-thousand-tonnes-per-annum Phase I Lyocell project had incurred cumulative capital expenditure of Rs 420 crore and procurement delivery was nearing completion.

The Phase II Lyocell expansion, with planned capacity of 110 thousand tonnes per annum, had its environmental-clearance application at an advanced stage of submission. In cement, UltraTech targets total grey-cement capacity of 242.9 million tonnes per annum by the exit of FY28, compared with 210.1 million tonnes per annum after Q2FY27 additions.

Conclusion

Grasim's Q2FY27 results showed a clear divergence between the accounts: record standalone revenue, EBITDA and PAT were substantially aided by the Rs 3,968 crore UltraTech dividend, whereas consolidated results eliminated that intra-group income and included the Rs 767 crore Canada pulp-joint-venture charge. Consolidated revenue still rose 26%, led by Building Materials, Cellulosic Fibres and Chemicals.

The next disclosed milestones are Birla Opus's H2FY27 double-digit revenue-market-share aim, Birla Pivot's H2FY27 EBITDA-profitability target, and progress against the Rs 3,157 crore FY27 standalone capital-expenditure budget. Grasim also disclosed that UltraTech is targeting 242.9 million tonnes per annum of grey-cement capacity by the exit of FY28 and that Lyocell Phase I procurement delivery is nearing completion.