Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Grasim Industries Limited (NSE: GRASIM) Q4 2026 Earnings Call dated May. 20, 2026
Corporate Participants:
Ankit Panchmatia — Head, Investor Relations
Hemant Kumar Kadel — Chief Financial Officer
Unidentified Speaker
Himanshu Kapania — Managing Director
Jayant Dhobley — Business Head
Analysts:
Unidentified Participant
Pathanjali Srinivasan — Analyst
Naveen Sahadev — Analyst
Prateek Kumar — Analyst
Amit Purohit — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 earnings conference call of Grassim Industries. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference call to Mr. Ankit Panchmatia, head Investor Relations of Grassim Industries.
Thank you. And over to you, Mr. Ankit.
Ankit Panchmatia — Head, Investor Relations
Thanks Good evening and thank you for joining Grassim fourth quarter and financial year end 2026 earnings call. The financial statements, press release and presentation are already uploaded on the websites of stock exchanges and our website. For your reference for safe harbor, kindly refer to cautionary statement highlighted in the last slide of our presentation. Our management team is present on this call to discuss our results and business performance. We have with us Mr. Himanshu Kampania, managing Director, Grassim Industries and Business Head, Birla Opus paints.
Mr. Hemant Kadil, Chief Financial Officer, Grassim Industries. We also have with us Mr. Dan Duble, Business Head of Chemicals, Synlussic Fashion Yarn and Insulators Business Mr. Wadi Raj Kulgarni, Business Head of Synthetic Fibers Business Mr. Sachin Chahy, CEO Birla Opus and Mr. Sanjeev Komravili, CEO Birla Pivot. Let me now hand over the call to Mr. Himanshu for his opening remarks. Over to you sir. Good evening everyone and thank you for joining grasping quarter four earnings call. Happy to share that FY26 has been another landmark year in Grafin’s journey of transformation.
A journey that has steadily evolved the company from being a leader in select manufacturing businesses into a diversified platform of high growth future oriented enterprises. Over the last several years we have consciously built capabilities across manufacturing, consumer facing businesses, digital platforms, financial services and next generation building material ecosystem. The outcome of these investments are in our results. Consolidated revenue stood highest at rupees 1.75,431 crores or exceeding 18 billion in US dollar terms registering compounded annual growth rate CAGR of 18% over period FY21 to FY26.
It’s truly remarkable to note that Grass Team standalone revenue have also reached an all time high of rupees 41,039 crores showcasing an impressive compounded annual growth rate of 27% during the same period. What we are witnessing today is the emergence of a structurally stronger graphene with multiple engines of growth, sharper strategic clarity and enhanced resilience across cycles. The key pillar of our transformation has been our unwavering commitment towards building leadership positions across every business in which we operate.
Historically, grafteam has built category leading business through scale, operational excellence and disciplined execution. Today that philosophy continues to guide our expansion into new age opportunities like paints and B2B E commerce business as well. Starting with paints first I want to take you back to a moment not too long ago when we announced entering the decorative paints business in year 2021. The market had questions, plenty of them. Could a newcomer truly challenge an industry dominated by deeply entrenched incumbent with decades of brand loyalty, distribution network and pricing power?
Was this ambition too tall? Today I’m here to give you the answer. In quarter four FY26 Villa offers delivered revenue growth of 52% year on year on a like to like basis. Further excluding CVIP on a like to like basis, the growth territory rises to 71%. In an industry where single digit growth is celebrated, we have doubled our top line in one year. That is a growth of 100% revenue in FY26 versus FY25. The FY26 performance disheartening despite the business was still not under its full scale operations as Tharatpur plant was commissioned in October 2025.
But revenue alone does not tell the full story. What truly matters is market share because market share in paints is trust made visible. As per internal estimates, the decorative paints industry revenue stood approximately at Rupees 15,500 crores in Quarter 4 of FY26, including listed and unlisted paint majors, Putti Wood finish and waterproofing companies and others. However, this excludes the industrial paints and other non decorative revenues. Our revenue market share expanded by approximately 90 basis points quarter on quarter, strengthening our position as the number three player in the organized decorative paint sector.
The FY26 revenue market share expanded by 370 basis points over FY25. When you combine Birla Office with our Birla White Putti business only, we are now nearing the number two position in Indian decorative paints. That is not a distant aspiration anymore. It is within striking distance. Let me take you through key enablers of Paint’s performance. Firstly, on the distribution front, Villa Office expanded its presence across 11,500 towns crossing 50,000 dealers build mark with 146 depots below. Opus ensures serviceability at industry benchmarks.
The institution sales channel has built a sizable foundation and grew 43% quarter on quarter and 212% year on year. With over 10,000 sites built in quarter 4 FY26 alone. Below offers products now have 70 plus specification approvals from multiple governments and other departments across cities with a similar number under various stages of approval. The institution sales channel is working on a robust pipeline of 45,000 sites in various stages of work across 650 plus towns. Secondly the team continued its focus to drive secondary sales from dealer counters to contractors and consumers.
The strong quarterly revenues have been possible on backups strong secondary by over 4.5 lakh active contractors who applied superior Birla office products the 10% pre paint promotion continued on 10 and 20 litre packs across all emulsion top coats and waterproofing range excluding sub economy top coats and undercoat primers. The strong relationship with paint contractors the key influencers continue to scale strongly on back of digital first foundation platform through a contractor app Opus ID helping the team to engage on a scale level in contributions with the centrally controlled tinting machine.
Analytics show strong colorant and shade consumption across geographies Pan India with nearly 37,000 active tinting machines in operation. The tinting data continues to guide decision making and understanding of consumer consumption trends. Villa offers continues to uplift the contractors and painters workforce with industry best schemes and loyalty benefits which remain unmatched even today. Besides working on programs to build painter skill sets and non monetary benefits including well being and education support for his family, the repeat purchase by contractors is given on back of superior quality which helps their reputation in the market and with the customers.
Villa operas continues to grow steadily also amongst the architect and interior designers. In short aid influencer segment where partner network has now crossed 3,000 active forms across 60 cities estimated to reach the second largest EIT network in the industry. Thirdly on the product front Villao office added 42 new products in FY26 majorly in a in house wallpaper b launch of painting tools under sub brand artis c waterproofing products under subcategory all dry and many more in the emulsion and enamel range.
With this the product portfolio expanded to 218 products and 1,850 plus SKUs serving a wide spectrum of customer preferences and market segments. Villa offer saw robust demand for its emulsion and waterproofing products where revenue market share has crossed double digit mark. The premium and luxury products contribution steady at 65% by value across all categories. Villa offers continues to benchmark its product offerings with the competition in real field environment and even now 75%. Villa offers products ranked number one in product security versus like to like competition basis blind product test by specialist applicators across emulsions, waterproofing, enamel, wood finish, distemper et cetera.
Fourthly on the brand front, one out of every two consumers spontaneously recall Villaofa’s brand. This is no mean feat. Villa offers brand continues to build on its already number two position in unaided top of mind recall and increasing its gap with earliest number two and number three legacy players. The brand has a strong 90% plus awareness which is built on back of continuous innovative campaigns. The recent high Decibel campaign in IPL 2026 featuring 10 cricket celebrities to champion a new era of change from individual endorsement to a collective validation voice echoing Mabiopus supporting companies product security has garnered major traction.
Look out for our latest Navi of US campaign with existing and new celebrities endorsing uniqueness of Billa offers products on its mission of enhancing customer experience in organized retailing of paints. Below exclusive branded franchise retail outlets hit a major milestone crossing 1,200 plus stores across 700 plus towns. As per our estimates, this is the largest organized retailing network in India now elevating paints purchase experience not just in metros but in mid and small towns including rural areas.
Our premiumization efforts continue with expansion of our full stack GST compliant and attractive transparent affordable professional painting process now available in over 6,000 pin codes through paint galleries across 400 towns. To our understanding this is amongst the only professional painting services offering attractive financial options with 6 and 12 month EMI at nearly no additional cost. An important tool in this inflationary environment. In conjugation with our industry first service warranty and through Opus Assurance campaign, Villa Office Paintcarraft continues to build brand trust and brings in lakhs of leads and thousands of project registration and contractor enrollment where Villa Opus products and services were eventually delivered with opus Assurance.
The fifth strong pillar is the installed capacity of 1,332 million litres per annum which is 24% of the industry capacity and the brand remains focused to drive the revenue market shares in line with the capacity shares in the midterm, the utilization steadily increasing across plants and with the rising output scale up of our sixth plant Kharagpur which was commercialized in quarter three FY26, the average distance traveled by product has come down by over 30% helping optimizing of logistic cost while improving serviceability to the market.
Now let me share updates on price hikes and raw material situations. As you will recall in the last investor call, Villa offers productively shared announcement to raise dealer prices by 2 to 6% in January and February 2026 across a range of products. This increase was to test the channel and consumer reaction by bridging the gap with industry peers in its in this first phase of pricing. I’m happy to share that the initial response to the price gap reduction is encouraging with primary and secondary sales continue to be Strong during this fourth quarter.
We are therefore delighted to share that in March 2026 Villa Opus on its own crossed the coveted 10% revenue market share mark based on nationwide retail study commissioned by us. I’ll give you a moment to absorb this. In April 2026 below, Opus announced its second and third phase of price increase to offset the raised input cost, these multiple price increases have been staggered for implementation within quarter one of FY27. The large percentage of decorative frames, raw material and entire packaging material is linked to crude derivatives.
The volatile geopolitical environment and steep depreciation of our currency against dollar have resulted in spiraling of cost of goods to as high as 20 to 25% of COGS and we are still counting the impact. This level of increase is unprecedented and and even now the raw material prices are unstable and unpredictable. Through these increases, the law of US has tried to cover the input cost escalation. However, if such global unrest persists, raw material prices could further escalate and may remain elevated for foreseeable future.
We understand the industry has never seen such high inflation that has forced the entire industry to take multiple price hikes back to back. This Vuca situation makes demand forecasting difficult and we need to closely monitor the situation as impact of price rise will slowly be felt by consumers and contractors in second half of quarter one and entire quarter two FY27 April 2026 primary sales performance remained in line with March and Billaoffice continues to monitor the secondary sales trend closely on a weekly basis along with price elasticity of demand.
With the inflation impact on input costs expected to continue until much after the war comes to an end, its impact on medium term consumer demand remains uncertain as demand elasticity curve will be fully tested in this period. Despite these cost pressures, the company will continue to offer 10% pre paint consumer proposition in spite of post price increase. What I can confidently say that Villa of US remains committed to driving market share gains and focused on our ambition to become number two player at the earliest while we steer business towards guided rupees ten thousand crore profitable revenue in the third year of full scale operations.
Shifting focus to second new business Villa Pivot which represents grafting’s commitment ToWards digitally enabled B2B E commerce ecosystem I want to take you to a world that most people never see, but one that powers everything around us. Every building you walk into, every road you drive on, every factory that produces the goods on your shelf. Behind all of this sprawling, fragmented and deeply insufficient supply chain for raw materials, steel, cement, chemicals, polymers, vitamins and other building materials.
These are the building blocks of India’s growth story and for decades procuring them has looked the same. Phone calls, handshake, opaque pricing, delayed deliveries and limited access to credit. It’s a market measured in hundreds of billions of dollars, and yet until very recently, it operated almost entirely offline. That is the opportunity we saw. That is why we build our pivot. One of the primary challenges is the highly fragmented supplier ecosystem, which makes it difficult for buyers to identify and engage with reliable vendors.
Additionally, the absence of transparent pricing often leads to mistrust and suboptimal purchasing decisions. Many businesses, especially MSMEs, also grapple with working capital constraints which hammer their ability to procure goods efficiently and on a scale. Further complicating procurement process is the inconsistency of supply as well as inefficiencies in logistics that can result in delays and increased costs. Product discovery remains limited, restricting access to a wider range of goods and innovative solutions.
Finally, there is significant gaps in technology adoption among MSMEs limiting their ability to streamline procurement operations and benefit from digital advancement. By focusing on these critical pain points, Billapivit aims to create a more integrated, transparent and efficient B2B procurement ecosystem. Coming to financial performance of Birla Pivot the pace of scale up has been extremely encouraging and ahead of our revenue guidance. Let me start with a number that I think captures the momentum better than anything else.
Our revenue for Quarter 4 FY26 more than doubled on yoy basis. This business is in a striking distance away from our annual revenue guidance of Rupees 8,500 crores. Now, in a business that is barely a few years old, doubling revenue is not just growth, it is validation. It tells us that the market was waiting for someone to solve this problem at scale. And we are doing exactly that. What is driving this? It’s not one thing. It is all cylinders firing together. New buyers are joining the platform at an accelerating pace.
Existing buyers are combining that with larger, more frequent orders. We are adding new product categories, expanding new geographies. Every lever we track active buyers, average transaction value, transaction volumes are steadily moving up. This was also a seasonally strong quarter and we captured the demand beautifully. Now let me Paint the picture of how wide our B2B commerce reach has become. Villa Pivot is now delivering to over 5,000 pin codes across more than 400 cities. And we’ve crossed 5,000 retail touch points.
Think about that for a moment. From metro construction sites to tire three towns where contractors is building a school or a small factory, we’re reaching them. We’re giving them access to the same quality products, the same transparent pricing, the same reliable logistics that were previously reserved for the largest players in the main market. This is not just commerce, this that is democratization. And our product portfolio keeps expanding. We are now scaling categories like steel bitumen, copper and aluminum, ingots and polymers, partnering with leading Indian and international brands to offer a breadth of SKUs that no single distributor could ever match.
We are becoming the one stop destination for building materials procurement in India. But here is what truly sets Billa Pivot apart. This is not marketplace with catalog and checkout button. We have built an integrated operating system for purpose built modules working in concert. Also what gives us unique edge is that we are not a startup parachuting into the space. We are Grassfield Industries part of Isabella Group with deep relationship across the building materials value chain from cement to chemicals to metals.
Our supply side credibility, brand trust and on ground presence are moats that no pure play digital platform can replicate overnight. We’re still in the early innings. Revenue has more than doubled but the Runway ahead is enormous. Our focus going forward is clear. Deeper buyer engagement with smarter AI driven insights. Expand our product categories and the hospital footprint, scale our embedded finance capabilities so more MSMEs can participate in India’s growth and relentlessly improve the platform experience so that once a buyer comes to Birla Pivot, they never want to go back to the old ways of doing things.
Before I hand over the call to Heman for financial performance and covering other businesses, let me spend some time on macro scenarios. We’re living in a period where the world is simultaneously built, witnessing extraordinary opportunities and unprecedented uncertain. Across continents, businesses and governments are navigating a rapidly changing global order shaped by geopolitical tensions, inflationary pressures, supply chain realignments, technological disruptions, climate concerns and changing consumer aspirations.
Crude oil prices and volatility in raw material costs continues to impact manufacturing and global trade. Networks that once prioritized efficiency are now being redesigned for reliability and strategic security. Across sectors from chemicals and metals to technology and consumer goods, organizations are balancing growth ambitions with cost discipline and operational agility. At the same time, the world is undergoing one of the biggest technological transformations in history. Artificial intelligence, automation, digital platform data led decision making are reshaping industries at an unprecedented pace.
The competitive advantage today is not merely scale, but the ability to innovate faster, adapt quicker and stay closer to the customer niche. Yet amidst these global challenges, there’s also optimism. Emerging economies, especially India, continue to demonstrate resilience and long term growth potential. India today stands out as one of the fastest growing major economies supported by strong domestic consumption, infrastructure investments, digital transformation, manufacturing expansion and a young entrepreneurial population.
However, in the backdrop of a recent caution expressed on mindful spending and responsible consumption, the message for businesses and households alike is clear. This is time for calibrated optimism and disciplined decision making. While India continues to remain one of the world’s fastest growing major economies, global uncertainties including geopolitical tension, commodity price volatility and inflationary pressure requires a balanced approach towards expenditure investment. The emphasis today is not on slowing aspirations, but on prioritizing efficiency, value creation and long term sustainability.
For businesses, this translates into sharper capital allocation, cost leadership and productivity enhancement. Such periods open strengthen economic resilience as disciplined spending combined with strategic investments creates a stronger foundation for sustainable growth in the years ahead. Let me now hand over the call to Himant for his remarks. Over to you Himant.
Hemant Kumar Kadel — Chief Financial Officer
Thank you sir for your remarks and one thing before I start. History has shown that moments of disruption often create the foundation for the next era of growth. The global environment may be complex, but it is also opening new avenues for collaboration, transformation and value creation. Those who can adapt with agility, invest with foresight and execute with discipline will define the future of industry and enterprise. With this note, I would start with our biggest business, building materials, which include cement, paints and B2B E commerce.
Himanshu sir has already covered paints and B2B E commerce. Let me give you
Unidentified Speaker
Key highlights
Hemant Kumar Kadel — Chief Financial Officer
Of our cement business. Alteka continues to strengthen its leadership in one of the most important sectors driving India’s infrastructure and housing growth. Story In April 2026, Ultratech crossed a historical milestone of 200 million tons per annum of total gray capacity. This makes Ultratech the world’s largest cement company outside of China. To put that in perspective, we have nearly doubled our capacity over the past six years and we remain firmly on track to to reach 240/million tons per annum by March 2028.
On profitability, total operating EBITDA per ton stood at the highest mark of rupees 1253. Over the past two fiscal years, FY25 and FY26 combined, we have delivered cumulative efficiency gains of rupees 185 per ton. This is not a one off. It is the result of sustained focus on fuel mix optimization, logistics efficiency and operational excellence across our plants. These structural cost levers give us confidence that margin will continue to improve even in a competitive pricing environment. The Board of Taskors of Contract Equipment has announced a strong dividend payout of Rupees 240 per equity share subject to the shareholders approval at the ado.
The dividend declaration underscores attracted resilient business model backed by a long term commitment towards scale, operational efficiency, sustainability and nation building. For Grassim, the total cash inflow from this dividend would be nearly rupees 4000 crores excluding textures. Coming to cellulosic fiber. We stand before you with tremendous confidence in the trajectory of this business that is not just keeping pace with the global trends but actively shaping the future of sustainable textile.
Let me set the stage with a powerful fact. Cellulosic fibers are the fastest growing segment in the Indian fiber basket, expanding at a CAGR nearly 2x that of other fibers. This is not a temporary blip. This is a structural shift driven by sustainability, cotton constraints and rising consumer demand for eco friendly fabrics. Our phase one Lyocene capacity at Harrier of 55,000 tonnes per annum, part of the total proposed 110,000 per annum expansion is progressing well. The macro environment is firmly in our favor.
China’s operating rates have climbed to 92% in Q4 up from 87% a year ago signaling robust global demand. At the same time, China’s inventory levels have dropped to just 11 days, a clear sign that supply is tight and demand is accelerating. Our celluloset fiber segment delivered revenue of 4614 crore in Q4FY26, a commanding 14% increase year on year. Full year revenue surged to rupees 17,104 crore from rupees 15,897 crore up 8% year on year. This growth was powered by drill engine of volume expansion and a deliberate pivot towards higher value.
Specialty fiber. EBITDA stood at rupees 588 crore in Q4 up two times and full year. EBITDA was up 15% to rupees 1751 crore from rupees 1524 crores. This was not just about volume, it was about operating efficiencies, a favorable product mix and the tailwind of benign pulp prices. Now let me talk you. Let me walk you through the strategic positioning of our chemical division which continues to be a cornerstone of Grassim’s Diversified Growth Story Our Floral Kelly business maintains undisputed market leadership.
With an installed capacity of 1.5 million NPA, we are expanding from 1505 kilo TPA to 1530 kilometers while evaluating additional capacities driven by growing demand from diverse end user industries like alumina, organic and inorganic chemicals, textiles and FMCG industries etc. Caustic product sales volume stood highest ever at 321,000 tonnes in Q4 and 1232kt for full year FY26 specialty chemicals revenue grew 5% year on year. However, higher input prices, mainly ECH, practically partially impacted profitability in that segment.
Our revenue mix is evolving well. Specialty chemicals now contributes 27% and chlorine derivatives 22% reflecting our deliberate shift towards higher value downstream products. Our financial services subsidiary Aditi Birla Capital represents a compelling play on India’s long term financialization story backed by a diversified and scalable financial services platform, spending, lending, asset management, insurance and wealth solutions. As India witnesses rising household savings, shifting from physical to financial assets, increasing insurance penetration and rapid credit carbonization, the company is strategically positioned across multiple high growth segments rather than relying on a single business cycle.
Its ability to consistently grow revenue and expand the lending book and assets under management demonstrates strong education capabilities even amid a volatile macro environment. With rising incomes, formalization of the economy and expanding digital infrastructure and increasing investor participation through SIPs and mutual funds, we believe that Aditya Birla Capital is well placed to participate in multiple structural growth trends simultaneously making it a diversified proxy for India’s evolving financial ecosystem.
Aditya Birla Capital Board has approved capital debt of Rupees four thousand crore by way of equity shares through preferential allotment. Given the growth prospects, Rasim’s board has approved an investment of rupees 2,880 crore maintaining our stake at 52.3% on a semi valuated basis. Coming to the other segments, both renewable and textile business has delivered robust performance for the quarter. Revenue for the renewable business grew by 60% year on year and textile business was higher by 14% year on year.
Renewable EBITDA grew by 55% and textile business EBITDA stood at rupees 35 crore compared to a loss of rupees 8 crore. I am pleased to share that the Board of Graphene has announced a final dividend of 500% amounting to rupees 10 per equity share, underscoring our long standing commitment to create value for the shareholders. This marks the 63rd consecutive year of uninterrupted dividend payments reflecting our financial strength, resilience and consistent focus on rewarding shareholders across business cycles.
With this remark, I will now open the floor for Q and A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to move yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mihailsha from Nomura. Please go ahead.
Unidentified Participant
Hi sir. Congrats on a good set of numbers. First question is on paints. Wanted to just understand your view on how should one think about the growth from year on as you’ve already attained scale with respect to dealer reach and tinting machines. Similar mode to quite a few of the legacy players. So how much more growth do you foresee coming from further penetration of dealer reach and increasing tinting machine reach? Or will the growth largely come from improving throughput? So that’s my first question.
Ankit Panchmatia
Thank you Mehesh. So we will get we are very confident of growth and the first and foremost industry is likely to move from a single digit growth to a double digit growth in FY27 while we observe the impact of raised prices and elasticity of demand. But all trend shows that this is going to be a double digit growth year. With this as sort of opus is concerned there is a lot of growth that is possible for us and we see growth both in numerical distribution expansion and improved throughput. Let me cover the numerical distribution expansion.
We are currently at presence on large and small towns to 11,500. We are anticipating to cross this to beyond 15,000 by the end of this financial year. And the second is even the existing towns. There is a lot of scope for us on overall basis because the total number of dealers in the industry is excess of 100,000. But the largest component of growth is obviously come through throughput with the existing dealers having tasted success with one range of our category of products. For example, some of them have done immersion and others have done enamel with the confidence with the first range of products they’re likely to be able to expand to the entire range.
I repeat we have emulsions, enamels, waterproofing, wood finish, this temper and for our franchise partners, wallpapers and exclusive products. We also see expansion through expanding the retail networks. So we remain very confident that we achieved a triple digit growth last year and we remain confident of a high double digit growth. Sorry, I’m going to pass on these incrementally on the accent.
Himanshu Kapania
Yeah. So like Himalti said, just to reinforce the fact that numeric expansion across the market for dealers will continue to play an extremely important role. But like Simantra said, expanding the product range will be critical to build the throughput per dealer
Ankit Panchmatia
That you mesh.
Unidentified Participant
So my second question is if you can talk a bit on the profitability front on the paint sector. You’ve highlighted in the PPT that there is improvement in performance of paints. When you speak about the building material segment which was also led by, you know, paint on the EBITDA level, is this largely due to getting scale or do you. Or given that now you’ve got some scale, there is some reduction in rebates to dealers or there is a reduction in the discounting. How should one think about that? And one clarification.
You know you had highlighted that three years after your full operation you would want to reach 10,000 crores. So should we consider FY26 as first full year of operation? Because it’s only been two quarters since your sixth plan had SAS commissioned. So FY28 would be the third year or FY29 you would be considering as a third year. So that was my second question.
Ankit Panchmatia
So FY26 is what internally we’re taking as the first full year operation even though the pains started or the fixed plan started in the third quarter of last financial year. So we don’t want to do it, we want to take stiffer targets for ourselves and we will take first full year operations of FY26. So in the sequence of profitability we want to again repeat in the order of our priority. Our order of priority is number one, we want to become the number two decorative paints operator in India. Second sequence of priority for us is 10,000 crore and third sequence of priority is profitable.
We want to use all the key words together but we’re not splitting them in the sequence that we would like to achieve. Having said that, where does the one profitability come from? Profitability for us we have invested ahead of time on fixed cost and you can see that both in terms of largest number of sales and service force and second is ahead of time management and branch. These are all. Both are in the fixed cost nature and as sales goes up they will cover and give us the EBITDA benefit. The second profitability angle is to get better returns because of our variable cost and the variable cost will again Come by us being able to a get better reach as we our buying ability increases so we can negotiate better prices.
So and with the fixed plants coming in, optimization of our plants on power, optimization of our logistics cost. All of this will result in bringing down our variable cost. There is also some optimization on products. As we introduced most our products with a single supplier. We are in the process of bringing in the second and the third supplier which gives us as you bring in competition among raw material suppliers, we will also get not only scale benefits but other level of cost benefits. So these are the routes for profitability.
But as I mentioned the sequence is for us remains number one, number two position, then getting a revenue and finally achieving profitability.
Unidentified Participant
But it’s a very clear and thank you for your clear answers. Wishing all the very best.
Operator
Thank you. The next question is from the line of Patanjali Srinivasan from Sundaram Mutual fund. Please go ahead.
Pathanjali Srinivasan
Hello sir. Congrats on a good set of numbers. I have couple of questions. So firstly, in your early remarks you mentioned that we are within striking the sense of becoming the number two player. I think last year the number two player in India did approximately 10,000 crores of sales. So how close are we when we say we are within striking distance? What is our range that we are mentioning here?
Ankit Panchmatia
I’ll clarify this. I’ll read from the notes that I the presentation we made combined revenue of BILA OP Office plus BILA White business which is what is measured by all of the all the paint measures brings us nearly to the level of the existing number two excluding the industrial revenue. Okay, so this risk. So when you quote a number that number is annual number and that number includes industrial plus decorative. When we quote a number we quote only the decorative part of the business. We include the putty side of the business.
That is the statement that I made as a starting point which is the current situation as far as quarter four or FY26 going forward. Our ambition and stated ambition is on its own build offers in the decorative paints business. Only in the decorative paint business, not including the industrial paints business will likely be number two. I hope it’s clear the numbers that are quoted. We have internal estimates, we do market research and we get firm confirmations of multiple sources. And we are very confident that the numbers that we have are trending toward what we have quoted.
Pathanjali Srinivasan
Thank you sir. That’s comforting. Yes sir, that’s. That provides a lot of clarity. My second question is related to something one of the previous participants asked. So with respect to throughput per dealer, how where would we stand versus the industry benchmarking and what is the leeway that is there for growth there?
Himanshu Kapania
I’m going to mute. Yeah, sure. So. Hi, this is Sachinya. When you look at dealers, dealers operate typically in a various scale of operation. Whether it’s a class B, class C, class B class dealer, depending upon what kind of business they are doing. In each of these subsets we have a fair market presence and our throughput is in line with our fair market presence and consequently that gives us a fair bit of comfort that we are aligned to the industry throughputs and in each of these dealer sets.
Ankit Panchmatia
So just to add, obviously we are not the market leader. So the throughput is best for the market leader. They have in our assessment about between 20 to 25% additional dealers. It is the reason why they are such a strong market leader is the throughput that they get from the dealers. Because as Sachin mentioned, the proportion of a category dealership business is significantly A and B is significantly higher than our proportion there. In the case of number two, we have to focus on number one and number two as we are asked as the number three, they have a different mix, they have a reverse pyramid that they have a larger proportion of a category which constitutes their business.
And then disproportionately our business is far more democratized because we are more national presence as well as evenly distributed. That’s why our efforts is more to be able to through the, through the root of distribution to expand throughput in each of the categories of business whether it is A, B, C and D far more than what what we currently have. This is what I can give you at this point of time.
Pathanjali Srinivasan
I get the strategic part of what you’re saying, sir, but I just wanted to know a rough indexing in terms of. Because we have started some time back, I would not expect a recently started dealer to have a high throughput. But some of our earlier dealers have they reached fairly like a couple comparable throughput to some of the established players or are we still like further away from that? I’m just trying to understand if we’ll get more growth from the existing distribution because we are still like relatively new in the market in terms of the number of dealers that we have over two three year period.
Himanshu Kapania
If you could give me some
Pathanjali Srinivasan
Color on that, I’ll be very helpful.
Himanshu Kapania
Right. So like I was mentioning about the four different classes of dealers abcd, just to give you a rough index, while each subsegment has been growing robustly in line with our overall growth. Just to give you a perspective from a range lens, the top dealer would be stocking almost two to two and a half times the bottom dealer as well as if I were to look at throughput per dealer, it ranges between four to five times the bottom dealer. So obviously our strategy of focusing on the top dealers driving business from the top industry contributing dealers is also paying rich dividend.
This is our market go to market strategy of expanding the range availability in the large dealer sets incrementally. I just
Ankit Panchmatia
Add for your benefits so that you can absolutely clear our older dealers who spend more than 18 months with us. Our counter share is significantly higher, as high as 25 to 50% in these outlets. And their throughput matches with legacy paint operators. So their throughput as the dealer becomes older and his comfort with entire range of products is there. He is tending to achieve the similar throughput as a legacy leader is. If that’s the answer that you’re looking for.
Operator
Sorry to interrupt. May we request Mr. Srinivasan to please rejoin the queue. We have other participants waiting for the turn. Thank you, ladies and gentlemen. In order to ensure that the management is able to address questions from all participants, we will request you to please limit your question to two per participant. If you have a follow up question, you may rejoin the queue. The next question is from the line of Amit Gupta from ICICI Securities. Please go ahead.
Naveen Sahadev
Good evening sir. This is Naveen Sahadev. Am I audible?
Unidentified Speaker
Yes.
Naveen Sahadev
Oh, thank you. So thank you for the opportunity. So my first question was on the capital allocation. Now of course our subsidiary has like you know, announced a significant dividend. And just today also there is an update in terms of 2,880 crore investing. AB Capital. How should one look? I’m
Operator
Sorry to interrupt Mr. Gupta, but we are unable to hear you, sir.
Naveen Sahadev
Okay, I’ll just repeat again. Am I audible?
Operator
Yes, please go ahead.
Naveen Sahadev
Yeah, so my first question was on that, let’s say investment, which we are like in capital. I’m sorry to interrupt, Mr.
Operator
Gupta, we are unable to hear you may be requested to please check your connection and rejoin the queue. Thank you. The next question is from the line of Siddharth Mehratra from Kotak Securities. Please go ahead.
Hemant Kumar Kadel
Congratulations on the big set of members and thank you for the opportunity. So continuing on the previous participants query, we noticed that out of the sizable dividend of around 4000 odd crores. We’re going to invest roughly 2900 odd crores in our NBFC business. So just wanted to Understand given the fact that previously we used to distribute it to our shareholders. What will be the capital allocation strategy going ahead?
Ankit Panchmatia
I don’t know what the term of capital allocation. Just from a cash flow perspective. You can do your maths. It’s straightforward net of tax that are we receiving from our subsidiary from in the cement. We would prefer to allocate that fund to a dividend to our existing shareholders as well as increasing maintaining our stake in Adithabilla Capital. The entire revenues and EBITDA generated from graphene will be reinvested in growth of graphene businesses. I hope that. Yes.
Hemant Kumar Kadel
So just to sort of clarify sir on this. Whenever we need to increase our stake or sorry maintain our stake that is the only time when we will be sort of using the dividends. Otherwise there will be.
Ankit Panchmatia
No, no we are not. We’re not talking of a long term policy and view the current allocation of fund at this point of time. Grassim we have maintained for the last three years. Grassim will maintain that we are in a growth business. We have introduced two new growth businesses and we have to stabilize these two new growth businesses. And Grasseville needs its support around that. So we are supporting the grass new businesses by reinvesting the surplus that is getting generated from the core businesses as well as now the.
As far as this year is concerned we have allocated the cash that we received to be able to expand or to be able to maintain our stakes in Aditya Birla Capital.
Hemant Kumar Kadel
Got it sir. So basically for other sort of growth businesses we’ll be sort of using internal accruals. This is a one off measure. Is that understanding correct?
Jayant Dhobley
Yeah. Yes, absolutely.
Hemant Kumar Kadel
Got it. May I just ask a follow up. What is our. Since we are past our peak CapEx phase what sort of CapEx guidance should be sort of bid in for the respective divisions? Capex guidance for 2027. We will be able to share you next quarter are just working on it. Give us some time. Okay sir. Thank you. Thank you for the.
Operator
Thank you. The next question is from the line of Pratik Kumar from Jeffries. Please go ahead.
Prateek Kumar
Yeah, congrats for good results. My first question is on. On the new businesses. Can you. I mean while you have talked about it but can you just. And again on profitability path for planes and pivot business as company starts moving towards revenue target individually for these segments in terms of profitability and when can we look forward to get separate disclosures for the segment?
Hemant Kumar Kadel
We will start with B2B. Okay. Hi. Hi Pratik, this is Sandeep Here I’ll give you a little bit of background on the profitability path that Villa Pivot is on. You know we had mentioned this as part of our results in Q3 as well. We have been steadily of course our growth momentum has already been shared in the opening comments. You can see that we’ve been, you know, our growth momentum was far ahead of the guidance that we’ve given on the profitability front. Even our margin and EBITDA direction has also been very, very positive.
Our goal for this financial year FY27 is to exit with EBITDA breakeven and we are well on that path. It might actually happen a little sooner as well. But fairly confident that we will exit this financial year with EBITDA and the priorities remain very,
Naveen Sahadev
Very clear that we will continue to drive the revenue growth trajectory. We’ll deepen our presence in the category, but
Ankit Panchmatia
At the same time we will on the paint’s profitability. There are two parts to the profitability. One is contribution and second is ebitda. Now we had a significant improvement in both gross and net contribution in quarter four and we expect to maintain that momentum going forward. As regards investment that we’re doing, we have a fixed cost which has which is now currently in a position to for a much higher market share because we are investing in manpower on a Pan India basis, both sales and service as well investing on in brand so that we are ready for tomorrow.
So as the contribution improves and scale improves, the EBITDA losses has a glide path on a quarter, on quarter and a year on year basis till we reach the 10,000 crore. And the glide path has already started. As regards final reporting, we should start that shortly.
Prateek Kumar
Sure. Thank you. And another question on capital allocation again I know you talked about investing in AV capital but how about like within your organic business. You obviously incubated two new businesses a few years earlier. Do you also evaluate investing in new businesses which can further add to your organic businesses in next few years?
Hemant Kumar Kadel
We have already announced expansion of our celluloset fiber business where at Harrier we are adding capacity of lyoceel of 110,000 ton per annum. First phase is already on progress and second phase we will announce that is the CAPEX plant. Right now we are implementing and further CAPEX plan as we get approval in terms of capacity expansion. We will share with you
Ankit Panchmatia
Just for one line answer on this. As of now we have enough on our plate. We want to stabilize our cash flows before we look at any further. So there is no further business to be disclosed. At this stage.
Operator
Sorry to interrupt. May we request Mr. Kumar to please rejoin the queue. Thank you. The next question is from the line of Amit Parohit. So Melara, please go ahead.
Amit Purohit
Hi, good evening. Thank you for this opportunity. Am I audible? Yes. Yeah. Two things. One I wanted to understand. You talked about two drivers for growth. One was distribution expansion. Second is throughput increase. And within that you highlighted that new product launches will also become a very important part in terms of. So just wanted to understand, are we under indexed in terms of product offerings when you compare it with the number one. Number two, that was first question. Second is if the.
I mean you indicated the targets remain same despite raw material prices increase and all, is there any. I mean plans of some of the schemes and all are we looking at. While you clearly highlighted that 10% scheme still continues. But just wanted to check if there is any business plan change that could be there or you may look at it maybe after a quarter or so. How do I think about it?
Himanshu Kapania
So Amit Sachin here. Thank you very much for your question. As far as product range is concerned, like Himanshu mentioned earlier, we have a full stack of products which have already gone into the market. In fact, in our franchisee stores we have a large set of exclusive products also which has been launched in the market. And today we can confidently say that a dealer can be extremely satisfied and continue to run and scale up his business with the Biddler Opus range of products. Like for like.
We are at even Stevens with respect to competition. While we will continue to identify white spaces and continue to add more products in the future. But as things stand right now, we are full stack up with respect to your second question on pricing and strategy in the market. While Himanshu very categorically laid down the glide path of first priority being the number two player in the decorative paints industry. Second, achieving the 10,000 crore turnover and the third being profitability. Our entire endeavor will continue to ensure that we are comparatively poised in the market to ensure the priorities are achieved.
So if there is a need for being so, then we will continue to act accordingly in the market.
Operator
Thank you. The next question is from the line of Rahul Gupta from Morgan Stanley. Please go ahead.
Prateek Kumar
Yeah. Hi. Thank you for taking my question. So two questions first. Now as you scale up both pivot and OPAs, you will see benefits of operating leverage kicking in over the next two years. Now if I see your implied profitability numbers, you have been clocking 3 billion pre tax losses every quarter for the last few quarters. Is it fair to say that this will come down materially through the year or is there a case that it may remain sticky for longer? So that’s my first question.
Ankit Panchmatia
Yes, it will come down.
Prateek Kumar
Got it. My second question is now that Sorry for harting it again. You have not guided on the longer term capital allocation strategy but given Ultratech and Iter, will the capital r be two subsidiaries where your shareholding is more than 50%? Is it fair to say even on the longer term perspective you would want. You would want to maintain your 50% plus shareholding in both these businesses
Ankit Panchmatia
At this point of time? The answer is yes.
Prateek Kumar
Thank you and wish you all the best.
Operator
Thank you. The next question is from the line of Naman Parmash from Navasia Investments. Please go ahead.
Hemant Kumar Kadel
Yeah, good afternoon. Thank you so much for the opportunity and congratulations on great set of numbers. My question is specifically towards your other business segment, specifically mentioning towards the insulator division. So currently if we see on that there is a very big shortages on the transmission lines and all. So how are we are planning towards the adding the capacity on the insulated division? And if you can break us, how was the overall sales in the insulated division in the current year and the capacity utilized?
Jayant Dhobley
Thanks for the question. You’re absolutely right that the electrical segment is growing very well and there is a big order backlog versus what the market is demanding. And while we post this through others, you can imagine underlying our set of growth in numbers on insulators has been good and will continue to remain good for some time. Our insulator business is divided in three parts. So we have a porcelain business. We are actually one of the world’s largest insulators and we are probably the world’s only insulator player that operates in porcelain, polymer long rods and polymer hollow composites.
As far as the porcelain business goes, we will only do productivity initiatives. We have no plans to increase our base capacity. As far as polymer longrod goes, we have recently done some capacity expansion. Those are sold out and we are looking at further investing or increasing the capacity in our hollow compost business. So we are quite bullish on the segment. But it’s not like we are planning to suddenly double or triple our capacity. Our aim is mostly to gain operational efficiencies out of our existing assets and do incremental investments in polymer long rods and polymer.
Hemant Kumar Kadel
So currently we have a capacity of 50,000
Prateek Kumar
Insulator and you are expecting to remain at similar level, but you will be thinking more adding on the composite of the Given the market has been shifting from crossing to composite end. So you will be thinking,
Jayant Dhobley
I’m concerned you can’t think of these capacities in terms depending upon the size of the insulator, the number can change. You know, if you have studied this process, if you make a larger insulator, it takes a larger cycle time. Right. With a smaller insulator it makes a smaller cycle time. And we supply this to EPC contractors. So we supply against orders. It’s not like our caustic business or our epoxy business. We do it by number of insulators and we do it make to order for very specific projects, for very specific.
Hemant Kumar Kadel
Understood. Lastly, if you can provide the sales number for the insulator for the FY26, it will be very helpful. And also the. I.
Jayant Dhobley
I think we have stopped disclosing this several couple of years ago. It’s. It’s part of our others. I don’t think it’s our intent to.
Prateek Kumar
Okay. Thank you so much. Yeah. For answering the question.
Operator
Thank you. The next question is from the line of Rahul Singh, an individual investor. Please go ahead. Mr. Rahul Singh, please go ahead with your question. Your line is unmuted.
Unidentified Speaker
Mr.
Operator
Rahul Singh, may we request you to please unmute yourself and proceed ahead with the question. As there is no response from the participants and even that was the last question for today, we would now like to conclude the conference on behalf of Grassim Industries. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.