Buy Grasim Industries; target of Rs 3550: Motilal Oswal

Motilal Oswal's research report on Grasim Industries

Grasim Industries (GRASIM) organized an interaction with senior management, who shared their perspectives on the Paints business and highlighted new initiatives being implemented in this segment. Management emphasized that gaining market share is a near-term priority, supported by unique industry offerings in product warranties and financing schemes. It believes that offering financing schemes and digital certificates will attract more customers. Further, it remains committed to achieving INR100b in revenue by FY28E (third year of full-scale operations), along with profitability at the operating level.

Outlook

We reiterate our BUY rating on the stock with a TP of INR3,550, as we value its: 1) holdings in listed subsidiary companies by assigning a discount of 35%, 2) standalone business at 6x Sep’27E EV/EBITDA, 3) paints business at 2.0x of investments, 4) renewables business at 10x EV/EBITDA, and 5) B2B e-commerce at 1.5x of Sep’27E revenue.

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