Grasim reverts back to a growth trajectory Grasim Industries Ltd, a subsidiary of Aditya Birla Group, is a diversified company with interests in cement, textiles, retail and chemicals. It is also the...

GRASIM's 2QFY21 result exhibits a strong recovery from the COVID pandemic. Both the Viscose and Chemicals businesses have seen near normalization of volumes and bottoming out of prices/margins. While...

Consolidated EBITDA fell 41.42% to Rs 2613 crore in Q1 FY21 over Rs 4461 crore in Q1 FY20. Profit after tax tumbled 61% to Rs 758.50 crore in Q1 June 2020 as against Rs 1932.27 crore in Q1 June 2019. The results have been severely impacted due to the unprecedented disruption in economic activities on account of COVID-19 induced lockdown in all the major markets during...

Grasim is the flagship company of the Aditya Birla Group, and is one of the...

Consolidated profit after tax for Q4 FY20 stood at Rs 1,506 crores against Rs 1,144 crore in the year ago period. Revenue, however declined by 11% to Rs 19,901.54 crores. OPM of the company stood at 14.21% compared to 20.37% in Q4FY19. As a result operating profits reported profit of Rs 2828.91 crore compared to profit of Rs 4568.06 crore. Other income fell 33% to Rs 300.13 crore. Interest cost increased by 2% to Rs 1712.47 crore. Depreciation...

Though the company has taken steps towards cost optimization along with calibrated Capex in FY21, and is focusing on value added products, we remain cautious on the stock and downgrade our rating to HOLD...

Revenue declined 20% YoY to INR21b in VSF and 24% YoY EBITDA declined 56% YoY to INR3.9b (in-line) due to lower prices, with the margin contracting 7.6pp YoY / 0.1pp QoQ to 9.1%. Lower demand, higher imports, weak global prices, and new domestic capacities led to weaker Chemicals The company has put expansion plans on hold due to weak demand. Given Grasims conglomerate business structure, we value it on an SOTP EV/EBITDA, b) UltraTech at a 60% holding company discount to target price, and c) other listed investments (AB Capital, Vodafone Idea, Hindalco, and Aditya Birla Fashion) at a 60% holdco discount to market prices. Lower demand, higher imports, weak global prices, and ramp-up in new domestic capacities by ~620ktpa resulted in weaker The Epoxy business EBITDA improved YoY on lower input prices. Century Cement and the Nathdwara plant reported improvement in realization, Operating cost (Q4FY20) declined on a YoY basis; Logistics was down 3% and Consolidated net debt reduced by INR52b to INR168.6b in 4QFY20.

Grasim Industries Limited's (Grasim's) reported marginally better-thanexpected Q4FY2020 results. Its standalone net revenue declined 19% y-o-y (down 4.1% q-o-q) as both the viscose and chemical divisions were affected by loss of sales during last ten days of March 2020 (COVID-19 led nationwide lockdown) along with continued weak pricing environment. OPMs of the viscose division were 75 bps higher q-o-q than chemicals led by lower pulp prices. Adjusted OPM of the chemicals division declined 374 bps q-o-q led by lower user demand, higher imports and domestic capacity additions. Hence on a blended basis, OPM remained almost flat q-o-q at...

Lukewarm performance across all segments except FinServ Revenue in Q3FY20 declined 1.4% YoY to Rs. 19,205cr, impacted by slowdown across all the segments. Company's Viscose Pulp business dropped to Rs. 2,194cr (-16.1% YoY), largely attributable to soft domestic VSF prices amidst declining global prices owing to excess capacity addition of 1.3mn in Asia alongside the impact of US-China trade war on global demand. Cement business fell 0.9% YoY to Rs. 10,354cr, on lower sales volume of 20.9MT (21.8MT in Q3FY19), with weak macroeconomic factor and construction ban in NCR region. Chemical business fell 12.6% YoY to Rs. 1,362cr, due...

2019 as against net profit of Rs 948.11 crore in Q3 December 2018. Profit before tax (PBT) for Q3 December 2019 stood at Rs 1454 crore, down by 16.82% from Rs 1748 crore in Q3 December 2018. EBITDA declined 4.78% to Rs 2968 crore in Q3 December 2019 as against Rs 3117 crore reported in Q3 December 2018. Profit after tax (PAT) for Q3 December 2019 stood at...

Grasim Industries Ltd started as a textiles manufacturer and later diversified into viscose staple fibre (VSF), cement and chemicals. The products and services of the company include Viscose staple fibre (VSF), Grey cement, White cement, Fertilizers, Chemicals, Mining, Fatty Alcohol/Fatty Acids, Insulators, Software, BPO, Finance and Insurance, Retail, Sponge iron and Textiles. The company also in the...

We expect RoE to be weak at ~3% in the next two years due to (a) margin pressure in both VSF and Chemicals and (b) higher depreciation and interest cost due to capacity addition. As a result, EPS is expected to decline over Given GRASIMs conglomerate business structure, we value it on an SOTP basis. Revenue and net profit after minority interest for 3QFY20 are at INR43.26b FY19 was a peak year for VSF margins. However, we have seen significant capacity addition in both VSF and Chemicals, which led to sharp contraction in margins in the past few quarters. Our target price values (a) the standalone business (fiber, chemicals, etc.) at 10x FY21E P/E, (b) UltraTech at 60% holding company discount to target price and (c) other listed investments (AB Capital, Vodafone Idea, Hindalco, Aditya Birla Fashion) at 60%.

Grasim Industries Limited's (Grasim) stock has risen by ~10% over the fortnight, led by two key developments in the telecom sector affecting VIL (Grasim holds 11.6%). Firstly, the government provided benefit of Rs. 23,920 crore to VIL through deferment of spectrum payment for FY2021FY2022. However, the Committee of Secretaries (CoS) set up to suggest relief measures for the telecom sector has been disbanded, which has put expectations of further relief in abeyance as of now. Secondly, the three major players in telecom have decided upon tariff hike from December 2019, which is seen as a sign of bottoming out of ARPUs for...

over Q2 September 2018. Profit was driven by superior performance of the company's subsidiaries, UltraTech Cement and Aditya Birla Capital. On standalone basis, the company reported a net profit of Rs 526.49 crore in Q2 2019 as against a net loss of Rs 1,186.66 crore in Q2 2018. Revenue from operations declined 6.3% to Rs 4,797.44 crore in Q2 September 2019...

Grasim Industries Ltd, a flagship company of the Aditya Birla Group, ranks among India's largest private sector companies.

Grasim Industries Limited's (Grasim) adjusted standalone net profit declined by 35.5% y-o-y to Rs. 526.5 crore on account of weak operating profit margin (OPM) in both viscose and chemical divisions. The VSF division was affected by global capacity overhang, elevated further by U.S.-China trade war. Caustic soda also performed poorly on the operational front owing to increased domestic capacity and weak demand. Exit prices for both VSF and caustic soda are lower, which is expected to put pressure on its standalone operations. Going ahead,...

2QFY20 standalone revenue declined 6% YoY to INR48b (in-line). EBITDA declined 38% YoY to INR6.6b (v/s est. INR9.1b); margins contracted 7pp YoY to 13.7%. Adj. PAT was down 36% YoY to INR5.3b (in-line). Volumes increased 3% YoY with revenues down 7% YoY to INR24b; EBITDA declined 34% YoY to INR3.8b due to fall in domestic 14 November 2019 realization. VSF margins declined 6.4pp YoY to 15.7%. Volumes decreased 7% YoY for the quarter.

We reiterate our BUY rating on the stock with a revised target price of Rs. 803 based on SOTP valuation. Margins up on strong cement performance Revenue grew 11.9% YoY to Rs. 18,861cr in Q1FY20 driven by strong growth in the cement (54.0% of revenue) and financial services business (19.2% of revenue) which increased by 12.8% YoY and 18.9% YoY respectively. The topline was affected by the slow growth witnessed by the Viscose business which grew 1.2% YoY and the decline in Chemicals business of 4.8% YoY. EBITDA grew 31.3% YoY to Rs. 4,217cr in Q1FY20...

Q1FY20, Profit fell in the quarter, misses estimates, dragged by exceptional loss on impairment of its payments bank venture Consolidated revenue for the quarter stood at Rs.18,861Cr.Consolidated EBITDA at Rs.4,217 Cr. recorded a growth of 31% YoY and PBT (Before Exceptional item) was up by 35% YoY to...

Grasim Industries' adjusted standalone net profit declined 31.6% y-o-y to Rs. 439 crore on account of weak operating margins in both Viscose and Chemical divisions. Both the divisions reported marginal growth in volumes y-o-y although it suffered on the realization front due to the macro environment. The near term outlook for viscose remains challenging owing to continued US-China trade war and over capacity in Indonesia. Caustic soda is affected by weak demand in user industries and declining chlorine prices. Grasim is undertaking capacity expansion of Rs. 7793 crore in...