Grasim Stock Surges 5% on Brokerage Firm Optimism Following Q4 Earnings
Grasim Industries Reaches All-Time High Following Strong Q1 Earnings
Shares of Grasim Industries surged 5% to a new record high of Rs 3,116.90 per share on May 21, solidifying its position as the top Nifty gainer. This significant increase comes on the heels of the company's announcement of its March quarter earnings.
Grasim Industries, an Aditya Birla Group firm, saw its March quarter net loss narrow to Rs 164 crore, compared to a loss of Rs 288 crore a year earlier. The company's standalone EBITDA rose 47% to Rs 659 crore, driven by improved performance in cellulosic fibres and recovery in textiles. Revenue from operations soared to Rs 11,774 crore from Rs 8,926 crore a year earlier.
The company's growth was led by the building materials business, primarily UltraTech Cement, and financial services, which drove overall earnings expansion and offset weaker profitability in investment-heavy standalone businesses. Birla Opus gained market share, strengthening its position with an estimated 90 basis-point sequential increase in the March quarter. Birla Pivot saw revenue more than double year-on-year.
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Brokerages have taken a bullish stance on the stock due to its improved performance in the paints business. Motilal Oswal has raised the company's FY27 earnings per estimate 2.6 times on account of high dividend income from UltraTech Cement. The brokerage has maintained a 'buy' rating on the stock with a target price of Rs 3,440.
Choice Institutional Equities has also expressed optimism about the company's paints business, valuing it on 2.5x FY27E EV/Sales, which translates to 1.5x investment outlay of Rs 12,000 crore. The brokerage has set a target price of Rs 3,500 for the Grasim stock.
| Brokerage | Target Price | Rating |
|---|---|---|
| Motilal Oswal | Rs 3,440 | Buy |
| Choice Institutional Equities | Rs 3,500 | Buy |
Note: The table above presents a comparison of the target prices and ratings assigned by brokerages to Grasim Industries.
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Investor Takeaway
Investors should consider Grasim Industries as a potential long-term play due to its improving performance in the paints business.
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