Grasim Industries Ltd. share price target

Profitability impacted by higher costs: Standalone revenue increased 16% YoY to INR53.5b (in-line) in 4QFY19, driven by VSF (+18% YoY) and Chemical (+17% YoY) segments. EBITDA grew 6% YoY to INR8.9b (our estimate: INR10.7b), with the margin contracting 1.5pp YoY to 16.8% due to higher cost.. PBT after exceptional items stood at INR6.7b (+36% YoY). The company reported PAT of INR5.4b (-9% YoY; our estimate: INR6.5b). VSF segment: Volumes increased 13% YoY led by debottlenecking of capacities, with revenue at INR26.2b (+18% YoY). Consequently, EBITDA rose...

from sustainable forests, helps conserve biodiversity and protects endangered forests. Every Livaeco garment has a unique tracer which helps trace the origin and full journey of the garment across the entire supply chain. Furthermore, it promises minimal usage of water which is turning into a scarce resource in our country vis--vis other natural fibres in its manufacturing process and lower greenhouse gas emissions. Livaeco is a splendid extension of Liva....

7 February 2019 Standalone revenues increased 21% YoY to INR52.9b (v/s our estimate of INR49b), led by VSF (+20% YoY) and Chemical (+19% YoY) segments. EBITDA grew 18% YoY to INR10.5b (v/s our estimate of INR9.9b), with margin contracting 0.4pp YoY (-1pp QoQ) to 19.9%. PBT stood at INR 8.8b (+21% YoY; v/s our est. The company reported PAT of INR6.08b, (+31% YoY; v/s our est.

Driven by robust 35%/46% YoY growth in both VSF and chemical segments coupled with merger of some of the businesses of ABNL with standalone operations, revenue grew by strong 75% YoY in Q1FY19 on standalone basis. Resultantly, standalone EBITDA margin improved sharply by 175 bps YoY driven...

Grasim Industries Limited (Grasim) is one of India's largest business conglomerates and the flagship of the prestigious Aditya Birla Group. From a humble beginning in 1947 as a textile manufacturer, Grasim grew exponentially to become India's largest Viscose Staple Fibre (VFS) and chlor Alkali producer. Post the merger with Aditya Birla Nuvo in June 2017, Grasim holds a majority stake of 60.21% in Ultratech Cement (India's largest cement producer with an annual capacity of over 90 million tonne) &...

operating profit advanced by 77% at Rs 3868.74 crore. The other income down by 1% to Rs 232.95 crore, thus the PBIDT rose by 70% to Rs 4101.69 crore. The Company interest cost jumped to Rs 1296.41 crore and depreciation rose 76% to Rs...

Revenue fell by 3.33% to Rs. 16856.7 Cr in Q1FY19 when compared to the previous quarter. Grasim Industries Ltd Q1FY19 results Comment

Standalone 4QFY18 revenue stood at INR46b, led by 15% YoY revenue growth in the VSF segment and 35% YoY growth in the Chemical segment. of INR8.7b), with the margin at 18.3% (flat YoY; -2pp QoQ). Tax rate was at 24.5% v/s 27% in 4QFY17, leading to adj. 23 May 2018 Volumes declined 7% YoY due to a delay in regulatory approvals for enhanced capacity. Realizations increased sequentially, led by higher proportion of domestic sales and specialty fiber, resulting in a 16% YoY increase in EBITDA to INR4.0b. Volumes rose 11% YoY on a like-to-like basis.

Cement companies' focus on capacity additions and fight for market share gain make us believe that the industry upcycle is still 1.5-2 years away. The urge to gain market share has put pressure on cement prices with March'18 prices (considered to be the peak season) at the lowest point of the year. Cement industry is expected to commission ~52mt of new capacities between FY19E and FY21E, as fight for market share continues. Acquisition of stressed assets of ~10mtpa capacity would also lead to incremental supply in the market during FY19-20E. Capacity utilization of the industry is expected to remain sub-75% till FY21E based on our...

Grasim Industries (GRASIM) is likely to gain scale in the VSF (increasing capacity by ~58% over FY18-21) and Chemicals (increasing capacity by ~37% over FY17-19) segments by way of capacity addition. VSF demand in India is likely to grow at ~8% over FY17-22 -around 200bp higher than the global growth rate - due to initiatives undertaken by GRASIM (e.g. ingredient branding in the form of 'LIVA'). VSF commands a stable margin owing to the rising proportion (38%) of high-margin specialty fiber in its portfolio and the increasing share of domestic sales (at 77%).