Buy Grasim Industries; target of Rs 1900: Sharekhan

Sharekhan's research report on Grasim Industries

Grasim Industries Limited (Grasim) reported a marginal miss on standalone revenue, led by healthy growth in chemical and textile businesses. The sharp contraction in Viscose OPMs led to miss on operating and net profit. Viscose demand is expected to see a sequential improvement in Q4FY2023, while ADD on Indonesian imports is being recommended. Chemicals fare well, while OPM would normalise as per expectations. Paints expansion is expected to complete by FY2025-end with the commercial launch expected in Q4FY2024. The B2B e-commerce business would be launched in a phased manner from H1FY2024.

Outlook

We retain Buy on Grasim with a PT of Rs. 1,900, as we roll forward our valuation multiple to FY2025 earnings, factoring in our revised PT for UltraTech and downwardly revising its standalone business valuation.

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