Grasim Industries share falls 3%, Metropolis Healthcare hits 52-week low post q4 results; what should investors do?

Grasim Industries and Metropolis Healthcare fell up to six per cent in Wednesday's intraday trade, a day after they came up with the results for the quarter ended March 31, 2022, on Tuesday. Metropolis Healthcare cracked six per cent on its previous closing to trade on 52-week low value of Rs 1593 per share on the BSE, while Grasim dropped over three percent on back weak earnings in the recently concluded quarter.  

Brokerage firms have come up with mixed views on Grasim Industries after the March quarter results.  

Grasim Industries 

The Aditya Birla Group firm on Tuesday reported a 55.56 per cent increase in its consolidated net profit at Rs 4,070.46 crore for the fourth quarter ended March 31, 2022 against a net profit of Rs 2,616.64 crore during the January-March quarter of 2020-21, Grasim Industries said in a regulatory filing. 
 

The company's revenue from operations was up 18.07 per cent at Rs 28,811.39 crore during the quarter under review, as against Rs 24,401.45 crore in the corresponding period of the previous fiscal. Its total expenses were at Rs 25,786.54 crore, up 23.45 per cent in Q4/FY 2021-22, as against Rs 20,887.16 crore, a year ago. 

Brokerage house Sharekhan maintained a buy rating on the stock with target price of Rs 1,740, which translates into an upside of 24% on Tuesday's closing price of Rs 1403 per share. Though it increased estimates downwards for FY2023-FY2025 factoring in lower OPM for the Viscose division and higher interest expense, it believes the company would be expediting its paint venture with a revised project cost of Rs 10,000 crore by FY2025 to become the second largest profitable paint company. 

It also sees chemical revenue growth as a big positive for the stock. chemical revenue grew by 69% y-o-y led by a 65% y-o-y rise in realizations for Q4FY2022.  

ICICI Securities slashed Grasim Industries from Rs 1732 to 1580, however, maintained an Add rating. 

Grasim Industries’ Q4FY22 standalone EBITDA was below our estimates, it said. Factoring-in the lower VSF margins, the brokerage cut standalone FY23E-FY24E EBITDA by 7-8% and reduced the target price. 

With a cautious view on the sector, Kotak Securities maintained Add rating for the counter with revised fair value of Rs 1500. 

It cut standalone EBITDA by 24% for FY2023 on weaker VSF/chemical margins, but revised fair value believing Grasim would benefit from strong volume growth in FY2023-24E.  

Metropolis Healthcare 

The diagnostic chain on Tuesday reported decline in consolidated net profit by 34 per cent to Rs 40 crore for the fourth quarter ended March, as per corporate filing of the company. Metropolis Healthcare had reported a net profit of Rs 61 crore in the January-March period of previous fiscal. For the fiscal year March 31, 2022, the company posted a consolidated net profit of Rs 215 crore, up 17 per cent from Rs 183 crore in 2020-21 fiscal. Revenue from operations rose to Rs 1,228 crore from Rs 998 crore in FY21. 

Meanwhile, the stock has corrected more than 30% in the last one month and has been trading under pressure for the past few sessions. The stock also slipped below Rs 1400-mark in Wednesday's session.  

Earlier, this week, Santosh Meena, Head of Research, Swastika Investmart Ltd, had said the Primary structure of the Counter is continuously following the downtrend. Stock is trading below all its below averages which is also a negative sign for the counter. "On the downside, 1600 is the critical level; below this, we can expect a free fall to the 1400 level. On the upside, 2150is an immediate susceptible area," the expert had said