About the Company:
Grasim Limited is a part of the Aditya Birla Group. The Company has expanded its operations into various businesses though it has started as a textile manufacturer in India in 1947. The company niche in VSF production along with the largest chemicals, cement producer and Diversified Financial Services (NBFC, Asset Management, and Life Insurance) player in India.
QoQ & YoY Performance:
India’s private sector Company has declared the results for the third quarter of the fiscal year ending March 2020.
- QoQ Performance: Consolidated Net sales/ revenue of the company recorded to Rs. 19,205.05 crores, up by 4.20% in the December quarter of FY20. Total expenditure (excluding interest and depreciation expenses) is Rs. 15,891.56 crores, climbed by 11.03%. EBITDA numbers down by 17.97%.
- YoY Performance: The Company has reported improvement in sales/revenue growth which is marginally down by 1.37% while expenditure (excluding interest and depreciation expenses) of the company increased by 2.65%. EBITDA numbers slipped by 15.30%.
- Profitability of the company: The Company posted PAT at Rs. 1,039.91 crores, tumbled by 29.39% QoQ and 9.40% fell on a yearly basis.
- CAPEX Plan: On a standalone basis, the total CAPEX plan of Rs. 7,800 Cr. is under execution for raising capacities in both the VSF and Chemical businesses, apart from ongoing modernization CAPEX at various plants. This capital expenditure is expected to be incurred over a three years period from FY20-FY22.
As per Lokesh Sethia, SEBI Registered, Research Analyst, the stock is trading at Rs.756.25 per share, down by less than half percentage. The company disappointed market a player with its weak set of numbers but the company is expected a revival in the cement industry. However, the company is incurring capex to increase capacities across its key businesses. Hence, we recommend it to ‘BUY’ with the target will be Rs. 906 per share for Long-Term view.
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