Grasim gets a ‘buy’ call from Jefferies, shares gain

Shares of Grasim Industries rose nearly 1 percent on February 21 after Jefferies put a ‘buy’ tag on the stock with a target price of Rs 2,300. The Aditya Birla Group company is poised to make significant strides in its paints business, with the imminent launch of its products and the opening of its first paints plant later this month.

Grasim is also planning to open two more plants during Q4FY24 and three more in the next 12-15 months.

The international brokerage said that with nearly 60 percent of its planned capex of Rs 10,000 crore invested in the paints business, Grasim is aggressively positioning itself in this competitive market.

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Analysts at Jefferies eagerly await the plant opening this week, where they hope to gain deeper insights into the company’s growth outlook and its strategy of balancing margin expansion against market share gains.

Morgan Stanley has an ‘overweight’ rating on the Grasim Industries stock with a target of Rs 2,430. The brokerage is bullish on the stock based on the company’s paints business launch which is said to be on track, and expansion of its B2B e-commerce business.

Motilal Oswal has a ‘buy’ call on the stock with a target price of Rs 2,670. According to the brokerage, Grasim has increased the capacity of specialty chemicals which will help it satisfy the increasing demand for value-added goods and specialised chemicals.

For the quarter ended December 2023, Grasim Industries reported a consolidated net profit of Rs 1,514 crore, registering a growth of 48 percent on-year. Its consolidated revenue rose 11.6 percent YoY to Rs 31,965 crore.

The net profit was adjusted for net of fair value gain accounted by Aditya Birla Capital Limited after the acquisition of 9.99 percent stake by ADIA entities in Aditya Birla Health Insurance, the company said.

In the previous session, the Grasim Industries shares closed 1 percent higher at Rs 2,198 on the National Stock Exchange (NSE). The stock has rallied 35 percent in the last one year, outperforming benchmark Nifty 50 which has risen 24 percent during this period.

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