India's Grasim posts loss in Q1 as paint business drags margins
BENGALURU, Aug 9 (Reuters) -India's Grasim Industries GRAS.NS reported a first-quarter loss on Friday, as its newly-launched paint business hurt margins while it struggled to keep a lid on costs.
Indian paint manufacturers are grappling with declining customer loyalty as consumers increasingly turn to more affordable options.
In response, companies have been slashing prices in an effort to regain market share amid intensifying competition.
Grasim's paints business, launched in February 2024 under the Birla Opus brand, has dragged its margins as the company continues investing in it.
The company reported a standalone net loss of 521.2 million rupees ($6.2 million) in the three months ending June 30 compared with a profit of 3.55 billion rupees a year ago, marking its second straight quarter of losses.
The standalone numbers don't include the earnings of Grasim units UltraTech Cement ULTC.NS and Aditya Birla Capital ADTB.NS.
Its earnings before interest, tax, depreciation and amortization fell to 4.18 billion rupees from 7.89 billion rupees a year ago.
Grasim, which also makes chemicals and yarn, reported a revenue growth of 11% to 68.94 billion rupees for the quarter, aided by its cellulosic fibres segment, which saw a 14% sales growth.
The chemical segment, which makes chlor-alkali, chlorine derivatives and speciality chemicals, saw a 4% revenue fall.
Its total expenses surged 19% to 70.57 billion rupees.
Rival Asian Paints ASPN.NS reported first-quarter earnings below estimates, while Dulux Paints maker Akzo Nobel India AKZO.NS reported a rise in profit.
Shares of Grasim were 0.7% higher after the results, trimming its year-to-date fall to 3.7%.
($1 = 83.9375 Indian rupees)
Reporting by Ashna Teresa Britto; Editing by Mrigank Dhaniwala
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
