Grasim Sees Textile Recovery, Fibre Profit Hit
Grasim Industries reported a mixed performance in its cellulosic fibres and textiles businesses for Q2FY26, with the cellulosic fibres segment facing profitability pressure, while the textiles business saw demand revival supported by festive season sales.
In the cellulosic fibres segment (cellulosic staple fibre and cellulosic fashion yarn), global market conditions remained challenging. In China, average industry operating rates improved to 89% in Q2FY26 compared to 86% a year ago, with inventory holding increasing to 15 days from 8 days. This resulted in a moderation in global CSF prices to US$ 1.51/kg. However, domestic CSF prices remained stable owing to rupee depreciation.
Grasim’s CSF sales volume declined 5% YoY to 209 KT, largely due to temporary logistics constraints at its Vilayat plant, which have now normalized. Specialty fibres, however, recorded 53% YoY growth, driven by higher exports. CFY volumes rose 3% YoY, supported by festive supply-chain demand, though realisations remained under pressure due to aggressive pricing from Chinese suppliers.
As a result, cellulosic fibres segment revenue stood at Rs 4,149 crore, up 1% YoY, while EBITDA declined 29% YoY to Rs 350 crore, with the company absorbing higher input costs rather than passing them on to customers. The company said Phase-1 (55 KTPA) of its 110 KTPA cellulosic fibres capacity expansion is on track for commissioning by mid-2027.
Meanwhile, Grasim’s textiles business saw a demand-led recovery, particularly in the premium and linen categories during the festive season. Revenue rose 6% YoY to Rs 586 crore, while EBITDA turned positive to Rs 24 crore, compared to a loss in Q2FY25, aided by normalized input prices and improved product mix.
The company also highlighted continued progress on sustainability. For the sixth consecutive year, its cellulosic fibres business received the top ‘Dark Green Shirt’ rating in Canopy’s Hot Button Report for responsible sourcing and forest conservation. On a standalone basis, Grasim increased the proportion of recycled water use to 49% of consumption and renewable power to 24% of capacity.
