Skip to main content

Grasim Industries - Result Update

Result Update: Grasim Industries.

• Revenues of the company for Q1FY11 remained flattish on YoY basis, inline with market estimates. This was impacted by decline in cement realizations but compensated to some extent by improvement in VSF realizations as well as volume expansion in cement division on YoY basis.

• Operating margins stood at 25.8% for Q1FY11 and Net profit declined by 47% for Q1FY11 led by decline in operating margins, higher depreciation charges as well as no extraordinary income as against Rs 3.5 bn in Q1FY10 on sale of sponge iron division.

• At current market price of Rs 1856, stock is trading at 6.7x P/E and 3.4x EV/EBITDA for FY11.Hence medium to long term investors can accumulate on declines, with a price target of Rs 2150.