ICICI Securities's research report on Grasim Industries
Grasim Industries (Grasim) has kicked-off FY26 on a strong footing. Its standalone entity’s (SA) Q1FY26 EBITDA has not only beat our estimate (at INR 3.85bn, up 18% YoY; I-Sec: INR 2.55bn), revenues of the new business segments (paints/B2B ecommerce) too have pleasantly surprised; also, EBITDA losses are in check. New segments’ revenue rose 13% QoQ (12% ahead of our estimate) while EBITDA loss (of INR 3bn vs. INR 3.15bn in Q4FY25) stood in-line. Q1FY26’s performance now presents a potential upward bias – 1) for FY26E SA EBITDA; and 2) to our revenues estimate for the new segments. Being conservative, we keep our earnings estimates intact and maintain BUY. Incorporating the increase in our fair value estimate for Grasim’s key holding – UltraTech Cement (61% of SoTP) – the revised TP stands at INR 3,480 (INR 3,363 earlier).
Outlook
We maintain our current earnings forecast. Retain BUY with a revised TP of INR 3,480 (Exhibit 5 for SoTP working).
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