With a market capitalization of ₹ 1,05,126 crores, Grasim Industries is a large-cap stock. The company is the flagship company of the Aditya Birla Group and its businesses consist of viscose Staple fibre (VSF), caustic soda, speciality chemicals, and rayon-grade wood pulp (RGWP) with plants at multiple locations. It also has certain other businesses such as fertilisers and textiles.
Grasim Industries in 2021 had announced its entry into the paints business with an investment of ₹ 5,000 crores. In May 2022, it decided to double its investment to ₹ 10,000 crores as the demand in the industry picked up for decorative paints.
In a recent analyst meeting, the management highlighted growth opportunities in the core business. It is investing in two high-growth businesses, Paints and B2B e-commerce.
“The company has committed a total capex of ₹10,000 crores for Paints (including working capital) and ₹2,000 crores for B2B e-commerce. Plant construction in Paints is progressing across six locations and the commissioning should start from 4QFY24.” said analysts at Motilal Oswal. They added that the company expects all capacities to become operational by FY-25 end.
Motilal Oswal is bullish on Grasim and has recommended a buy rating on the stock with a target price of ₹ 1,900. This translates to an upside of 18.75% as compared to its current share price of ₹ 1,600.
Global Brokerage Citi has a buy tag on the shares of Grasim with a target price of ₹ 2125. This indicates an upside of 32.81% as compared to its share price.
Written by Simran Bafna
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