Grasim shares under pressure as Street estimates Aditya Birla group firm to post weak Q4 results

Shares of Grasim Industries – an Aditya Birla Group company – were under pressure during Friday’s session ahead of its Q4 earnings today. Street estimates that the cement products maker is likely to post a weak set of financial results for the quarter ended on March 31, 2023.  

Grasim stock has been among the top Nifty gainers in an otherwise positive market, it dipped around 2 per cent to the day’s low level of Rs 1673.10 per share today as compared to the previous day’s closing of Rs 1703.10 per share on the BSE.

Zee Business Q4 expectations

The company is expected to report a net profit of Rs 322 crore for the final three-month period of FY23, which translates to a decline of 60.4 per cent year-on-year (YoY), while the revenue is seen to be almost flat at Rs 6,490 crore for the March quarter of the fiscal year 2022-23.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) of Grasim may come at around Rs 693.4 crore in Q4 and the margin may come under pressure at 10.7 per cent in the fourth quarter of FY23 from 11.8 per cent in a year ago quarter.

Street estimates

Domestic brokerage firm Sharekhan said, “Grasim is expected to report a 7.8 per cent YoY decline, but up 45.5 per cent sequentially, in operating profit owing to weak operating margins in Viscose, affected by lower realisations.” This is in line with Zee Business expectations.

The brokerage expects revenue growth to be flat or of 1 per cent YoY driven by revenue growth in the chemical division.

Sharekhan has a ‘buy’ rating on the stock with a target price of Rs 1900 per share, which implies an upside of 12 per cent from Thursday’s closing price of 1703 per share.

Grasim share price history

Grasim shares grew more than 21 per cent in the last one year as compared to 14 per cent rise in the Nifty index. Year-to-date, the stock has been flat with mere 1 per cent gain against flat Nifty50.

Grasim is India's pioneer in making VSF (Viscose Staple Fibre) – a man-made, bio-degradable fibre that is fast emerging as a sustainable alternative to cotton.