Brokerages bullish on Grasim Industries; Jefferies estimates Rs 230 per share gain

Grasim Industries shares fell on Tuesday after the company reported a 17 per cent Year-on-Year decline in its September quarter net profit at Rs 1,097 crore, down from Rs 1,327 crore in the year ago period. The high energy cost dented companies’ consolidated EBITDA which was reported at Rs 3,783 crore, down 12 per cent YoY.  

Yet, many top brokerages continue to show faith on this flagship company of Aditya Birla Group. Jefferies is most bullish on this stock and maintains a ‘Buy’ on it and raised the price target from earlier Rs 1970 to Rs 1980. An overall upside seen in this stock is up to Rs 230 or 13 per cent. The stock was recommended at the price of Rs 1749.    

JP Morgan maintains an ‘Overweight’ rating on this stock and puts a target of Rs 1980, increasing it from Rs 1870, earlier. Meanwhile, Citi’s target is at Rs 1950 and this brokerage has a buy recommendation on Grasim counter. 

Morgan Stanley is ‘Overweight’ on this stock and suggests a price target of Rs 1830.   

Grasim Industries shares were trading at Rs 1,719.60, down by Rs 28.90 or 1.65 per cent on the NSE. 

However, the revenues were up 22 per cent YoY at Rs 27,486 crore for the reporting quarter. 

 The company posted a strong performance by Chlor-Alkali business with zero net debt at standalone level in Q2FY23. The company in its quarterly earnings filings said that the launch of B2B E-commerce Platform for Building Materials is scheduled for Q2FY24. 

Its cement business under the brand name UltraTech Cement posted consolidated revenue of Rs 13,893 crore, up 16 per cent YoY in Q2FY23. The cement subsidiary reported an EBITDA of Rs 2,013 crore with sales volume at 23 MTPA.

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In its chemical business vertical, caustic soda sales volume was up 17 per cent YoY to 296KT in Q2FY23 on the back of new capacities commissioned in H2 last year (Rehla and BB Puram). Chlorine VAPs sales volume was up by 19 per cent YoY. 

The company suffered in its textile business on global decline in the demand of MMCF (Man-Made Cellulosic Fibres).  

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