*Specialty Fiber Play: High-Return Capacity Expansion* Grasim's Rs 3,094 crore Phase II Lyocell capex adds 110K TPA capacity by 2030, targeting 35% specialty fiber mix versus current 25-28%. This positions the company to capture premium pricing in high-margin segments. *Key Financial Metrics* Incremental revenue potential: Rs 1,200-1,400 crore annually post-2030. EBITDA impact: Rs 280-350 crore yearly at 20-25% specialty fiber margins. EBITDA margin expansion of 150-250 basis points driven by operational leverage and specialty fiber premiums. Estimated ROCE on new capex: 18-20%+, with payback horizon of 3.5-4 years—clearly accretive to returns. *Primary Risk* Raw material (wood pulp) cost inflation could compress margins materially. Execution delays beyond 2030 threaten timeline credibility. Demand softness in specialty fiber segments presents downside to volume assumptions. *Strategic Recommendation* *Approve capex*. Risk-adjusted returns justify deployment. Specialty fiber shift is defensible given margin uplift and backward integration synergies. Monitor pulp cost trajectory and market demand signals closely through construction phase.

*Specialty Fiber Play: High-Return Capacity Expansion* Grasim's Rs 3,094 crore Phase II Lyocell capex adds 110K TPA capacity by 2030, targeting 35% specialty fiber mix versus current 25-28%. This positions the company to capture premium pricing in high-margin segments. *Key Financial Metrics* Incremental revenue potential: Rs 1,200-1,400 crore annually post-2030. EBITDA impact: Rs 280-350 crore yearly at 20-25% specialty fiber margins. EBITDA margin expansion of 150-250 basis points driven by operational leverage and specialty fiber premiums. Estimated ROCE on new capex: 18-20%+, with payback horizon of 3.5-4 years—clearly accretive to returns. *Primary Risk* Raw material (wood pulp) cost inflation could compress margins materially. Execution delays beyond 2030 threaten timeline credibility. Demand softness in specialty fiber segments presents downside to volume assumptions. *Strategic Recommendation* *Approve capex*. Risk-adjusted returns justify deployment. Specialty fiber shift is defensible given margin uplift and backward integration synergies. Monitor pulp cost trajectory and market demand signals closely through construction phase.

*Specialty Fiber Play: High-Return Capacity Expansion* Grasim's Rs 3,094 crore Phase II Lyocell capex adds 110K TPA capacity by 2030, targeting 35% specialty fiber mix versus current 25-28%. This positions the company to capture premium pricing in high-margin segments. *Key Financial Metrics* Incremental revenue potential: Rs 1,200-1,400 crore annually post-2030. EBITDA impact: Rs 280-350 crore yearly at 20-25% specialty fiber margins. EBITDA margin expansion of 150-250 basis points driven by operational leverage and specialty fiber premiums. Estimated ROCE on new capex: 18-20%+, with payback horizon of 3.5-4 years—clearly accretive to returns. *Primary Risk* Raw material (wood pulp) cost inflation could compress margins materially. Execution delays beyond 2030 threaten timeline credibility. Demand softness in specialty fiber segments presents downside to volume assumptions. *Strategic Recommendation* *Approve capex*. Risk-adjusted returns justify deployment. Specialty fiber shift is defensible given margin uplift and backward integration synergies. Monitor pulp cost trajectory and market demand signals closely through construction phase.

*Specialty Fiber Play: High-Return Capacity Expansion* Grasim's Rs 3,094 crore Phase II Lyocell capex adds 110K TPA capacity by 2030, targeting 35% specialty fiber mix versus current 25-28%. This positions the company to capture premium pricing in high-margin segments. *Key Financial Metrics* Incremental revenue potential: Rs 1,200-1,400 crore annually post-2030. EBITDA impact: Rs 280-350 crore yearly at 20-25% specialty fiber margins. EBITDA margin expansion of 150-250 basis points driven by operational leverage and specialty fiber premiums. Estimated ROCE on new capex: 18-20%+, with payback horizon of 3.5-4 years—clearly accretive to returns. *Primary Risk* Raw material (wood pulp) cost inflation could compress margins materially. Execution delays beyond 2030 threaten timeline credibility. Demand softness in specialty fiber segments presents downside to volume assumptions. *Strategic Recommendation* *Approve capex*. Risk-adjusted returns justify deployment. Specialty fiber shift is defensible given margin uplift and backward integration synergies. Monitor pulp cost trajectory and market demand signals closely through construction phase.