Grasim Industries is expected to report stellar net profit growth on a year-on-year basis for the quarter ended March 2024. However, revenue is expected to decline YoY on account of muted volume growth and lower realisations in viscose staple fibre (VSF) and chemical divisions, according to analyst estimates.
Meanwhile, a lower operating profit margin (OPM) base YoY is expected to drive strong growth on an annual basis. The cement company is scheduled to announce its Q4 results on May 22.
Grasim Industries' standalone net profit is seen rising 77 percent on year to Rs 159.30 crore in Q4FY24, according to Bloomberg's estimate of four brokerages. The company's revenue is seen declining 5.8 percent YoY to Rs 6,356.30 crore as against Rs 6,750 crore in Q4FY23.
Sharekhan analysts believe that a low base will lead to strong net earnings growth YoY, although continued losses in paints and B2B business will put pressure on net earnings on a quarter-on-quarter basis.
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Analysts at Kotak Securities model a marginal 1.2 percent YoY volume decrease in VSF operations on a subdued demand environment and 8.3 percent YoY volume increase in the chemical operations on gradual demand improvement.
"We estimate standalone EBITDA at Rs 470 crore including (1) VSF EBITDA of Rs 390 crore (+169 percent YoY) and (2) chemicals EBITDA of Rs 240 crore (-34 percent YoY), mainly on account of lower prices apart from higher losses in the paints division," the brokerage said.
According to Motilal Oswal, the net profit of the bluechip firm is likely to soar 80 percent YoY to Rs 170 crore in Q4FY24, but 29 percent sequentially due to higher tax. The brokerage firm also forecasts the firm's standalone EBITDA to grow 20 percent YoY to Rs 500 crore and OPM is estimated to increase 1.6 percentage points YoY to 8 percent.
Analysts at Motilal Oswal expect revenue for the VSF segments to decline 1 percent YoY, while for the chemical segment, it is expected to drop 15 percent YoY.
Meanwhile, the EBITDA for the VSF segment is expected to grow 166 percent YoY, and OPM is expected to increase 6.5pp YoY to 10.3 percent.
Also, the Chemical segment’s EBITDA is expected to decline 19 percent YoY, and OPM should contract 80bp YoY to 14.6 percent, it predicted.
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