Grasim Industries, a key participant within the cement sector, noticed its shares rally practically 5 p.c on June 10 after world brokerage Morgan Stanley upgraded the inventory score to ‘Obese’ from ‘Equal-weight’ and raised its goal value to ₹3,500 from the sooner ₹2,975. The revised goal implies an upside of over 34 p.c from present ranges. The Aditya Birla Group firm was additionally named a “prime choose in protection” by the brokerage, with analysts bullish on each its core and rising companies.
Morgan Stanley’s optimism stemmed from Grasim’s better-than-expected launch of its paints enterprise, which the brokerage believes is now poised for its “subsequent leg of worth unlocking.” The agency mentioned, “The paints enterprise has fared higher than anticipated since launch,” including that “a number of alternatives are in play” for Grasim’s continued outperformance.
Whereas the brand new paints section has drawn consideration, Morgan Stanley emphasised that UltraTech Cement (UTCEM) continues to be the first worth driver for Grasim. “UltraTech stays the most important worth contributor. Grasim ought to profit from a multi-year earnings compounding story at UTCEM,” the brokerage famous.
The report additional said that Grasim’s diversification into new-age companies is progressing effectively and contributing meaningfully to its general valuation. “These companies are scaling up quick, driving earnings and worth optionality,” Morgan Stanley mentioned, whereas additionally hinting at a possible re-rating. It famous that the ‘Holdco low cost’ may slim because the paints enterprise positive factors traction and begins to materially contribute to earnings.
Sturdy Q4FY25 efficiency
Grasim’s sturdy fundamentals supported Morgan Stanley’s improve. The corporate reported a 9 p.c year-on-year rise in consolidated internet revenue at ₹1,496 crore for the quarter ended March 2025, in comparison with ₹1,370 crore in the identical interval final yr.
The consolidated income from operations jumped 17 p.c YoY to ₹44,267 crore, up from ₹37,727 crore in Q4FY24. Sequentially, income surged by 25 p.c from ₹35,378 crore in Q3FY25, whereas revenue after tax (PAT) grew 82 p.c from ₹820 crore within the December quarter.
Grasim additionally posted its highest-ever quarterly income, whereas EBITDA elevated 6 p.c year-on-year to ₹6,548 crore. Inspired by its sturdy efficiency, Grasim Industries’ board proposed a closing dividend of ₹10 per fairness share for the monetary yr ending March 31, 2025.
Inventory value pattern
Following the improve, Grasim’s share value rose as a lot as 4.8 p.c to hit an intraday excessive of ₹2,735 on June 10. The inventory now trades simply 5 p.c shy of its 52-week excessive of ₹2,875.45, reached in July 2024. It has additionally recovered 20 p.c from its 52-week low of ₹2,276.10, touched in January 2025.
Previously 12 months, Grasim’s inventory has gained about 10 p.c. After a 7 p.c decline in Might, the inventory has already gained 6.5 p.c in June, persevering with its upward momentum. It had additionally risen 5 p.c in April and 13 p.c in March. Previous to that, the inventory dipped 8 p.c in February however logged a modest 2.7 p.c acquire in January.
Disclaimer: The views and suggestions made above are these of particular person analysts or broking corporations, and never of Mint. We advise buyers to test with licensed consultants earlier than making any funding selections.
