Grasim Industries Q2 Results Review - Impressive Ramp-Up In Paints Segment: ICICI Securities

ICICI Securities Report

Grasim Industries Ltd.’s Q2 FY25 Ebitda, at Rs 3.25 billion, slipped 45% YoY (flat QoQ; being 35% below our forecast) due to –

1. higher-than-estimated loss for its new business of paints and b2b e-commerce;

2. loss in textiles and insulators business; and

3. lower-than-expected profitability for chemicals.

However, on the brighter side, ramp-up of the new paints business was heartening. In just the second quarter, post its maiden foray, paints’ revenues are estimated to have reached ~Rs 4 billion versus our estimate of Rs 810 million in Q1 FY25.

Acknowledging Grasim’s endeavour to grab high-single-digit market share by end-FY25, we revise up our FY26E sales for paints to Rs 40 billion (versus Rs 30 billion earlier). Even as we chop our FY25E/FY26E Ebitda by 31%/21% (to factor in the high Ebitda loss in ramp-up phase), our SoTP-based target price stands revised to Rs 2,731 (Rs 2,600 earlier). We upgrade Grasim to Add (from Hold).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.