Sharekhan has given Buy recommendation for Grasim Industries with a target price of Rs. 1680 in its research report issued on Mar 15, 2021

Sharekhan’s research report on Grasim Industries

VSF prices have risen by 88% from the historic lows in August 2020 and 48% since December 2020, led by strong demand in the Chinese textile market. The benefit of higher VSF prices is likely to accrue in current and ensuing quarters. Caustic soda prices have remained muted in Q4FY2021 although are expected to bottom out,which along with healthy demand for chlorine to improve upon profitability going ahead. The company has signed an MoU with Tamil Nadu government for establishing paint manufacturing plant in Chennai with investment of Rs. 750 crores. Paints to provide scalability and consistency to standalone operations.

Outlook

We retain our Buy rating on Grasim with a revised PT of Rs. 1,680 as we incorporate our revised PT for Ultratech of Rs. 8000 and revised market capitalisation of other listed subsidiaries (Aditya Birla Capital and Vodafone Idea).

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