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Change Change %
-15.70 -1.43%

Updated:23 Apr, 2018, 15:57 PM IST

Change Change %
-13.45 -1.22%

Updated:23 Apr, 2018, 16:01 PM IST

Research Report Detail

Report Date Call Price@Call Target Price
Stop Loss
Current Status Time Horizon
Motilal Oswal
16-08-2017 Hold 1103.00 1079.00
Target Hit Long (1Y)

Motilal Oswal maintains neutral on Grasim Industries

Grasim Industries earnings exceed estimates led by better realizations and strong realization drives profits: Standalone 1QFY18 EBITDA rose 9% YoY ( 6% QoQ) to INR5.55b, translating into a margin of 20.3% ( 2pp QoQ,-0.93pp YoY), led by realization improvement in the VSF segment. Revenue grew 14.4% YoY to INR27.4b, while PAT rose 8% YoY to INR3.47b, driven by lower interest and depreciation expense. We believe GRASIM post proposed restructuring exercise with Aditya Birla Nuvo will be the holding company for multiple diversified lines of business, including cement, finance, chemical and retail. This is likely to attract higher discount than earlier. We thus value its stake in Ultratech Cement and ABCL at 45% discount, and VSF business at 5.5x FY19E EV/EBITDA, arriving at a TP of INR1,079 (downside of 3%.) Maintain Neutral.

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