Sharekhan recommended Hold rating on Grasim Industries with a target price of Rs 803 in its research report dated November 14, 2019.
Sharekhan's research report on Grasim Industries
In Q2FY2020, Grasim’s standalone adjusted net profit was affected by weak operating profit margin (OPM) y-o-y in both viscose and chemical verticals due to pressure on realisation led by both global and domestic factors. Grasim’s capacity expansion plan of Rs. 7,749 crore in both viscose and chemical verticals to get operationalised during H2FY2021. The near-term outlook for viscose and chemical remains challenging due to weak exit prices, soft demand, capacity overhangs and continuing U.S.-China trade war.
We retain Hold on Grasim Industries Limited (Grasim) with unchanged PT of Rs. 803 owing to its key hangover of funding Vodafone Idea especially with increasing Vodafone Idea losses and increasing funding requirement.
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