Grasim Industries stock fell over 1% today to Rs 1814 after the company announced its Q1FY24 results. Grasim Industries reported its PAT at Rs 3553 million, up 280% on-quarter. Despite weak commodity prices, both VSF and chemicals, Grasim Industries’ standalone EBITDA margin stood at 10.8%, up 440bp on-quarter. Grasim Industries stock price has surged over 2% in the last one month and nearly 12% in the last six months. Analysts at Nuvama have recommended a ‘Hold’ rating on Grasim Industries stock whereas ICICI securities recommended an ‘Add’ stock rating.
Should you buy, sell or hold Grasim Industries stock?
Nuvama
Hold | Target price: Rs 1881
Motilal Oswal
Buy | Target price: Rs 2100
“The company has invested INR 36.4b in the Paints business until Jun ’23 and will further invest INR32.4b in 9MFY24. Most of the paints business capex (INR100b planned) will be completed by FY25. We largely maintain our EBITDA estimates for FY24/FY25. Margin in the VSF segment witnessed a strong recovery and we expect EBITDA/kg to be at INR13/INR18 in FY 24/25. Reiterate BUY with a TP of INR2,100 (Exhibit 9).”
ICICI Securities
Add | Target price: Rs 1933
“Given the increase in value of its holding in subsidiary AB Capital (post the recent investment of INR 10bn and run-up in its share price), our SOTP-based TP stands increased to INR 1,933 (earlier INR 1,841). We continue to like Grasim and maintain ADD given that: a) current margins of standalone business are likely to have bottomed out, and b) successful entry into paints will have significant rerating potential”.