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Last Updated : Oct 30, 2015 11:45 AM IST | Source: CNBC-TV18

Positive on Grasim Industries, target Rs 4000: SP Tulsian

SP Tulsian of sptulsian.com has a positive view on Grasim Industries with a target of Rs 4000.

SP Tulsian of sptulsian.com told CNBC-TV18, "Grasim Industries is a very dull and boring kind of stock because this is more of a holding company, 61 percent holding in UltraTech Cement. But, if I go by their numbers which they have reported yesterday, they have their two independent core business, one is Viscose Staple Fibre and second is Clor Alkali where they are increasing the capacity that we call caustic soda. They have acquired Aditya Birla Chemicals, but the Viscose Staple Fibre division has really perfomed very well largely because there has been closure of some plants in China because of the environmental issues and because of the maintenance. If you see the earnings before interest and taxes (EBIT), it has gone up by about 5 percent, almost doubled on a quarter-on-quarter (Q-o-Q) basis and even earnings before interest, taxes, depreciation and amortisation (EBITDA) has increased by about 4 percent."

"Consolidated numbers are purely incorporating the UltraTech numbers. The standalone earnings per share (EPS) has increased to Rs 48 for H1. It is Rs 58 for the whole of FY'15 and I think that this trend which is likely to continueIf you take Viscose Staple Fibre which is a cotton substitute, people have been talking that there has been damage to the crop, even in Vidarbha there has been low production of cotton, even in Punjab, there is whitefly which has damaged the cotton crop and if the plant remains closed for environmental issues in China, I do not think they will get opened quickly," he said.

"Overall going forward, I have a positive view and I have given a target of about Rs 4,000 on the stock which has not got broken or which has not really seen that kind of range coming in, but in the next three months, I am expecting the stock to move to Rs 4,000."

"UltraTech Cement has been operating at 71 percent capacity of the industry average of the country at 65 percent. So, you have a positive view on UltraTech plus the standalone business of Grasim Industries."

"Morganite Crucible (India) is a multi-bagger stock, one can look for may be if they have a couple of years view, a target of Rs 1,000. But, I am going for a target of Rs 600 in the next three months or so where the downside, I think is very minimal and one can expect a price of Rs 600 in a couple of months or may be 2-3 months and may be Rs 1,000 in a couple of years."
First Published on Oct 30, 2015 11:27 am
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