The share of the cement manufacturing company gained up to 0.18 percent after Motilal Oswal, a well-known brokerage recommended a ‘buy’ rating.
With a market capitalization of Rs 1.41 lakh crore, the shares of Grasim Industries Ltd closed at Rs 2,078.75 per share, which fell around 0.02 percent as compared to the previous closing price of Rs 2,078.30 apiece.
Looking into Grasim Industries’s performance, revenue increased by 11 percent from Rs 28,638 crore in Q3FY23 to Rs 31,965 crore in Q3FY24. During the same period, net profit decreased by 41 percent, from Rs 4,455 crore to Rs 2,603 crore.
Motilal Oswal, one of the well-known brokerages in India, gave a ‘Buy’ call on the cement stock with a target price of Rs 2,670, indicating a potential upside of 28 percent from Wednesay’s closing price of Rs 2,078.75 per share.
Here’s the explanation for the bullish upside target:
● According to the brokerage, Grasim increased the capacity of specialty chemicals (Epoxy) to 246KTPA from 123KTPA before. This will help the firm satisfy the increasing demand for value-added goods and specialized chemicals.
● The business has begun trial manufacturing of paints at three plants: Ludhiana, Cheyyar, and Panipat. Birla Opus has completed its brand architecture and plans to debut its full product range in FY25E.
● The business has completed the expansion of its specialized chemicals capability. In December 2023, the capacity was doubled to 246KTPA. This will help address the increasing demand for value-added goods and specialized chemicals. Chlorine incorporation will climb to 70% from the existing 63%.
● Capex was Rs 14.3 billion in 3QFY24 and 44.6 billion in 9MFY24, during the same period, with the Paints business accounting for Rs10.9 billion and Rs 34 billion. The estimated capital for FY24 is INR59.3 billion (including Rs 42.8 billion for the Paints division).
In FY22-23, the company invested more than Rs 14,000 crore in capital expenditure, its highest ever. The construction of Decorative Paints factories accounted for around half of this spending. Over the next two years, the company wants to increase investments and become a major player in the decorative paints business.
Written by:- Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
