While Grasim's profitability in the VSF segment remains under pressure, low inventory (~8 days) and higher capacity utilization (~89% in Q3 FY25) in China should help support prices. The Paints business is witnessing strong traction, and going forward, revenue momentum and its movement in losses will be the key monitorables.
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Motilal Oswal Report
Grasim Industries Ltd.'s Q3 FY25 Ebitda was below our estimate, primarily due to lower profits in the VSF business (Ebitda margin of ~8% vs estimated ~12%). The company's Ebitda declined ~48% YoY to Rs 2.7 billion (42% miss), led by losses in new business segments (~7% decline ex-new business segments).
Operating profit margin contracted 4.8% YoY to ~3% (estimate: ~6%). It reported a net loss of Rs 1.7 billion (estimated Rs 14 million profit) versus PAT of Rs 2.4 billion in Q3 FY24.
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