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    Should you buy, sell or hold Grasim shares after Q1 earnings? Here's what brokerages say

    Should you buy, sell or hold Grasim shares after Q1 earnings? Here's what brokerages say

    Should you buy, sell or hold Grasim shares after Q1 earnings? Here's what brokerages say
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    By CNBCTV18.com  IST (Published)

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    On Friday, Grasim Industries had reported a standalone net profit of Rs 481.6 crore for the quarter ended June 30, beating Street estimates.

    Grasim Industries shares slipped into negative territory in afternoon deals on Monday erasing the gains registered the previous day. On Friday, the flagship company of conglomerate Aditya Birla Group had reported a standalone net profit of Rs 481.6 crore for the June quarter, beating Street estimates.
    Grasim's revenue came in at Rs 3,762.7 crore in the June quarter, as against Rs 1,335.7 crore a year ago. The company's EBITDA came in at Rs 740.3 crore in the quarter, as against an EBITDA loss of Rs 225.6 crore in the year-ago period, and its EBITDA margin was at 19.7 percent.
    Analysts in a CNBC-TV18 poll had estimated the company's profit at Rs 311 crore over revenue of Rs 3,710 crore. They had predicted its EBITDA at Rs 628 crore and the EBITDA margin at 16.93 percent.
    Here's what brokerages said on the company's Q1 performance:
    ICICI Securities
    The brokerage said Grasim Industries' standalone EBITDA in Q1 was above its estimates led by improved profitability across both the viscose staple fibre and chemicals segments. It expects the company's expansion to drive volume growth going forward. ICICI Securities has maintained an 'add' rating on the stock with a target price of Rs 1,498.
    Grasim achieved the EU’s best available technology compliance at the VSF Vilayat site, which is expected to drastically reduce its sulphur-to-air emission by 85 percent. The Nagda plant is likely to be the first to achieve zero liquid discharge in the viscose industry which is expected to be completed by Q2.
    Motilal Oswal
    The brokerage has maintained a 'neutral' rating on the stock with a target price of Rs 1,590. The company's Q1 performance surprised positively on the EBITDA margin front driven by sustained cost reduction and better realisation in the chemicals business, according to Motilal Oswal.
    The brokerage raised its FY22E and FY23E standalone EBITDA estimate by 18 percent and six percent respectively to factor in an improved demand outlook and better margin for both the viscose staple fibre and chemicals segments. The holding company discount of 46 percent is in line with the 10-year average of 48 percent, said Motilal Oswal.
    JPMorgan
    Grasim reported relatively strong quarterly earnings with a recovery in the chemicals segment, said the brokerage, which has maintained an 'overweight' rating on the stock with a target price of Rs 1,820. New project commissioning in H2 should drive volume growth for the company over FY22-23, according to JPMorgan.
    At 2 pm, the Grasim stock traded 0.39 percent lower at Rs 1,491.75 apiece on BSE, underperforming the headline Sensex index, which was up 0.25 percent.
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