Comments
CapitalAim
Grasim Industries (Buy)
CMP: ₹869.75
Target: ₹1,150
Grasim Industries is the flagship company of the Aditya Birla Group. It started as a textiles
manufacturer in India in 1947. Today, it is a leading global player in VSF (viscose staple fire) and the largest chemicals (Chlor-Alkali-s) player in India.
We believe Grasim Industries is trading at huge discount due to Q2 and Q3 results. In Q2, PAT decline due to exceptional item and in Q3 its PAT increased but other income declined. Company is focusing on backward integration expanding which will improve its margins.
In addition to its standalone businesses, the company’s subsidiaries have also been doing well.
With most cement companies increasing prices by ₹25-50 per 50 kg bag in recent months, cement companies are expected to report better numbers in the coming quarters.
The concerns about Grasim’s loss-making subsidiary, Idea, have also been allayed due to its recent merger with .. Vodafone as the merger has restricted Grasim’s stake in Idea to 11.55 per cent. As its standalone business as well as subsidiaries are doing well, we feel that the holding company discount, of around 35 per cent, particularly considering the performance of its standalone business, is not justified.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.