Grasim, a subsidiary of Aditya Birla Group, is a building materials company based in Mumbai, India. It is a leading manufacturer of cement, Viscose Staple Fiber (VSF), sponge iron, and chemicals.
The market cap of Grasim Industries Limited, as of March 2018, is more than Rs.72,000 crore.
Company’s Wealth and Recent Performance
Q1 FY 2018-19
The key financial highlights of the company’s performance for Q1 FY 2018-19, ended 30 June 2018 are as follows:
- The standalone revenue of the company recorded an increase of 75% and stood at Rs.4,789 crore.
- The standalone EBITDA (Earnings before interest, taxes, depreciation, and amortization) registered a growth of 89% and stood at Rs.1,176 crore.
- The standalone PAT stood at Rs.643 crore, up 85% YoY as against Rs.347 crore in Q1 FY 2018.
- The consolidated revenue registered an increase by 71% and stood Rs.16,857 crore.
- EBITDA recorded an increase of 33% and stood at Rs.3,212 crore.
- The consolidated PAT (Profit After Tax) stood at Rs.1,116 crore, up 25% as against Rs.890 crore in Q1 FY 2018.
- The Viscose Business recorded an increase of 35% in net revenue and stood at Rs.2,480 crore. The EBITDA was up by 68% and stood at Rs.586 crore.
The key financial highlights of the company’s performance for Q1 FY 2018-19, ended 31 March 2018 are as follows:
- The standalone revenue recorded an increase of 53% and stood at Rs.15,788 crore.
- The standalone EBITDA registered an increase by 35% and stood at Rs.3,542 crore.
- The standalone PAT for Q4 stood at Rs.526 crore, up 67% as against Rs.315 crore.
- The consolidated revenue recorded an increase by 56% and stood at Rs.56,162 crore.
- EBITDA was up by 31% and stood at Rs.10,879 crore.
- The consolidated PAT for Q4 stood at Rs.914 crore, up 18% as against Rs.775 crore in Q4 FY 2017.
- Grasim’s consolidated revenue from operations in the third quarter of the FY18 increased by 78% Y-o-Y to Rs.15,291 crore. More than 50% of this revenue came from cement, with other major contributors being Viscose and financial services.
- Similarly, the consolidated EBITDA also improved by 44% over the corresponding quarter last year, with the figure for Q3 FY18 being Rs.2,696 crore. The company’s net worth as of December 31, 2017, is Rs.57,157 crore with a debt-equity ratio of 0.27.
- The consolidated profit after tax (PAT) decreased by 17% over the previous quarter. However, its standalone performance was exceptionally well for the quarter, considering that the PAT increased by 12% Y-o-Y and 43% Q-o-Q, to Rs.1,396 crore and Rs.474 crore respectively.
- The September-December quarter also saw a 9% Y-o-Y improvement in VSF sales volume. However, it was the cement segment that outperformed the rest by registering a 33% growth in sales volume driven primarily by the boost in infrastructure and affordable housing space in India.
Grasim Stock Trends in 2018
- On January 1, 2018, Grasim stocks commenced trading at Rs.1,165 on NSE. By mid-January, the share price had crossed Rs.1,200 driven by company updates. However, by the end of the month, the Grasim share price was back in Rs.1,100 levels and the closing price on January 31, 2018, was Rs.1,160.
- In early February, Grasim shares entered the Rs.1,000 territory owing to weak worldwide cues and turbulence in markets across the world. The shares recovered slightly thereafter and crossed Rs.1,100 again driven by a decent performance in the third quarter. The closing price at the end of the month was Rs.1,152 on NSE, which in comparison to the start of the month, is not a significant loss.
- The price of the stock at the beginning of March stood at Rs.1,152. The scrip continued to fall throughout the month by around 70 points. By the end of the month, the stock price stood at Rs.1,085.
- The scrip was stable in the month of April and decreased marginally. The opening price of the stock by the end of April was Rs.1,086.
- In the month of May, the price of the stock continued to decline further. It fell by around 60 points and ended the month at Rs.1,042.
- The price of the stock at the beginning of August was Rs.1,025. It fell in the first half of the month and reached Rs.986. It was up by few points and ended the month at Rs.1,066.
- The scrip fell further in the month of September. As on 14 September 2018, the price of the stock stood at Rs.1,025.
Grasim Stock Trends in 2016 and 2017
- At the start of 2016, Grasim stocks were trading at levels above Rs.700. By late January, the share price dipped to enter the Rs.600 territory and this trend went on for the entire month of February. In March 2016, Grasim stocks commenced an upward run and crossed Rs.750. The closing price at the end of the month was Rs.768.83 on NSE.
- The stock price continued to soar through the months of April and May on the back of company performance updates and positive global cues. In the final days of May, Grasim shares were changing hands at around Rs.860-870. The rally stopped in early June with the stocks finding some stability at levels above Rs.850. However, towards the end of the month, Grasim shares commenced another bullish run, with the closing price on June 30, 2016, being Rs.933.13 on NSE.
- In July, Grasim stocks on NSE and BSE were being traded at levels above Rs.900. In August, the shares crossed Rs.1,000 although they failed to sustain at that level for long. Shortly after crossing Rs.1,000, the shares were back in the Rs.900 territory and it remained that way for the remainder of August. In September, the final dividend of 225% was announced by the company, which in conjunction with company updates, took the stock price beyond Rs.950.
- In October, Grasim Industries Limited announced Face Value split from Rs.10/share to Rs.2/share. This was followed by a gradual decline in stock price, which post demonetisation, turned into a nosedive. From being traded at around Rs.990 in early October, the shares went down to Rs.800 levels by mid-November. The remainder of the year witnessed Grasim shares trying to recover but the efforts were in vain. The closing price on December 30, 2016, was Rs.862.75 on NSE.
- Grasim stocks commenced trading at around Rs.870 in early January. By early February, they were back in Rs.900 levels and by the end of the month, the share price had crossed Rs.1,050. Throughout March, Grasim shares were traded at levels between Rs.1,000-1,100.
- Things did not change significantly until late April when there was a dramatic surge in stock price and the shares crossed Rs.1,150. By early May, Grasim shares were being traded at above Rs.1,200 though it was only for a brief period. By mid-May, the stocks were back in Rs.1,100 territory it stayed this way up until late June when company updates on merger drove the stock price to values well-above Rs.1,200.
- The rally continued in the first half of July with the price entering the Rs.1,300 territory, albeit it was only for a brief period. The news of Grasim stocks turning ex-dividend did not bode well for the investors and the stocks plunged into the Rs.1,000 territory. The month of August witnessed the Grasim stocks stage a comeback and this continued this early September when the company announced a final dividend of 275%. At this point, the stocks were trading at around Rs.1,230. This rise was followed by a nosedive which took the stocks back in the Rs.1,100 territory.
- Things were fairly stagnant for the first half of October. The stocks commenced another upward run in late October and this rally lasted until early November. The shares attained the highs of July 2017 once again, only to shed it all in the subsequent weeks. The month of December was an uneventful one for the investors and the closing price at the end of the year was around Rs.1,165.
Should you invest in Grasim Industries Limited?
- Grasim Industries Limited is the flagship company of the famed Aditya Birla Group and has business interests in various segments such as textiles, cement, retail, and chemicals. It is also one of the world’s largest producers of VSF with a 9% global share. Secondly, Grasim is heavily involved in the cement industry through its subsidiary UltraTech Cement Limited which dominates the cement sector in the Indian market. These two businesses together account for more than 80% of its revenues.
- The company is already leading player in the VSF segment and is well on the path to ramp up its capacity. Its sales volume over the course of last two years has increased by more than 20% owing to its expansions at Vilayat and Harihar. Needless to mention, the company is strategically placed to meet the VSF demand in domestic and international markets. The same can be said for its cement business too. UltraTech’s position as the market leader in the cement industry has positioned it well to meet rising demand for cement, driven primarily by the boost in infrastructure and affordable housing sectors.
- Being a part of the Aditya Birla Group, it goes without saying that the company is built on strong foundations. It has also generated steady revenues over the years and has performed well financially in comparison to its peers. Grasim stocks are fundamentally good to hold for a long period, although it is advisable to consult your financial planner and carry out a thorough research before investing.
Grasim Industries Limited is an Indian manufacturing company that primarily does business in VSF, textiles, cement, and chemicals. Headquartered in Mumbai, Maharashtra, Grasim is a part of the Aditya Birla Group that operates across four continents in more 10 countries. Grasim is a leading player in the country in many sectors such as VSF, cement, and chlor alkali.
History of the Company
Grasim Industries Limited was incorporated in 1947 and in 1950, the company commenced the production of fabric in Gwalior. Over the course of next couple of decades, Grasim entered the VSF segment by setting up plants in Nagda, Madhya Pradesh, and Harihar, Karnataka. Right around the same time, Grasim also branched into chemicals by starting caustic soda production in Nagda. In the early 2000s, Grasim diversified further and acquired a 10% stake in Larsen & Toubro Cement Limited, and soon followed it with acquiring a controlling stake in the same. Subsequently, the name of the acquired entity was changed to UltraTech Cement.
Mr. Kumar Mangalam Birla - Chairman, Aditya Birla Group
Mr. Birla has played a crucial role in making Aditya Birla Group one of the largest multinational conglomerates in India. He took charge of the Group in 1995 at the young age of 28 owing to the untimely demise of his father. In the 20 odd years that he has led the company, Mr. Birla has not only paved way for its businesses to dominate the sectors in which they operate, but he has also greatly enhanced the stakeholder value. Furthermore, he has been instrumental in enhancing the Group’s global footprint through more than 30 acquisitions in India and worldwide.
Mr. Birla has received several awards over his illustrious career, a few of which are the International Advertising Association’s ‘CEO of the Year Award’ in 2016 and the ‘Global Leadership Award’ in 2014, awarded by the US India Global Leadership Council.
In addition to serving as the Chairman of the Aditya Birla Group, Mr. Birla is also the chancellor of the Birla Institute of Technology & Science, and the chairman of the IIT, Delhi.
Dilip Gaur - Managing Director, Grasim Industries Limited
Mr. Gaur has been a part of the Aditya Birla Group since February 2008, when joined the Group’s subsidiary Hindalco Industries Limited as the Group Executive President and Head of its Copper Business. After serving in this capacity for a little over six years, he became the Deputy Managing Director and Business Head of the UltraTech Cement Limited. This was his last stint before becoming the MD of the Grasim Industries Limited. Mr. Gaur is alumni of Harvard Business School.
Grasim Industries Limited Listings in NSE, BSE, and Indices
The equity shares of Grasim are available for trading on the country’s two prominent bourses - Bombay Stock Exchange Limited and the National Stock Exchange Limited. The company has also issued global depository receipts (GDR), which are listed on the Luxembourg Stock Exchange. The respective codes for the same are mentioned below:
BSE - 500300
NSE - GRASIM
ISIN - INE047A01021
SECTOR - DiversifiedThe company also forms a part of several stock market indices in India, some of which are mentioned below:
- NIFTY commodities
- S&P BSE 100
- S&P BSE 500
- S&P BSE 200
- NIFTY 50 USD
- S&P BSE AllCap
The address of the registered office of Grasim Industries Limited is listed below:
Grasim Industries Limited
Contact number - 07366-246760/766
Karvy Computershare Private Limited
Unit: Grasim Industries Limited
Karvy Selenium Tower B, Plot 31-32, Gachibowli
Financial District, Nanakramguda
Hyderabad - 500032
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