Grasim Industries Ltd is among the best companies in Aditya Birla Group. It ranks in India’s largest private sector companies. Grasim Industries core business consists of viscose Staple fiber (VSF), caustic soda, specialty chemicals, rayon-grade wood pulp (RGWP) with plants at multiple locations. This company has certain other businesses such as fertilizer, textile, etc.
Sector: Materials (Cement)
Large Capital: 115117 Crores
Key takeaway
Revenue sources
- Ultratech Cement (54%)
- Financial Services (22%)
- Viscous vertical (12%)
- Chemical Vertical (7%)
- Other business (5%)
Cement Vertical (Ultratech)
Grasim Industries Ltd is holding Ultratech Cement Ltd which is again a flagship company in the Aditya Birla group. Ultratech is largest manufacturer of gray cement, ready mix concrete, and white cement in India. . The company has a consolidated capacity of 116.75 Million Tons Per Annum (MTPA) of grey cement. It has 23 integrated plants, 1 clinkerisation plant, 26 grinding units, and 7 bulk terminals. Its operations span across India, UAE, Bahrain, and Sri Lanka.
Financial Services Vertical (A.B. Capital)
Grasim Industries is the main promoter of Aditya Birla Capital Ltd which is a financial company in the group. It has a strong presence across investing and financing solutions with a presence in Housing finance, insurance, broking, private equity, insurance advisory, etc. It has a pan-India presence with a network of 850+ branches, 200,000+ agents and channel partners, & a tie-up with 90 banks.
Viscose Vertical
Grasim Industries is the biggest producer of Viscose Staple Fiber(VSF) in India.
It derives 90% of its revenues from the local market and the rest 10% revenue comes from exports.
The company also entered the Viscose Filament Yarn (VFY) segment following the merger with Aditya Birla Nuvo Ltd in 2017 and the acquisition of rights to manage the Rayon division of Century Textiles. Presently, it is the largest exporter of VFY in India. The current manufacturing capacities of the segment stand at 48 KTPA.
Chemicals Vertical
Grasim Industries is India’s largest caustic soda producer and is a market leader in the chlor-alkali segment. In 2016, its caustic soda capacity increased by 95% post its merger with its sister company Aditya Birla Chemicals Ltd. Presently, it operates 8 manufacturing units of caustic soda with capacities of 1,147 KTPA of caustic soda & 123 KTPA of the epoxy plant. Presently, its capacity utilization rates stand at ~90% in its caustic soda production facilities.
Other Businesses
Textiles – Company set up Jaya Shree Textiles in 1949 which to today’s date is one of the leading linen and wool manufacturers in India. It sells its products in over 50 countries across 6 continents.
Insulators – The company is India’s largest and the world’s 4th largest manufacturer of electric insulators. It produces the widest range of insulators in India including insulators for transmission lines & substations up to 1200 kV voltage level, as well as equipment & railways. It owns 2 manufacturing facilities in Gujarat & West Bengal with a manufacturing capacity of ~55 KTPA of insulators.
Fertilizers – The company was a leading agri-solutions provider to the agro-industry in India but recently it decided to divest its interest in its fertilizers business.
Foray into Paints Business
Recently, the company announced that it has decided to enter the paint industry by incurring an expenditure of about 5,000 crores over the next 3 years.
Grasim Industries Today
 | Basic Materials |
 | Building Materials |
 | Aditya Birla Centre, Mumbai, India |
 | India |
 | 91 22 6652 5000 |
 | http://www.grasim.com |
Grasim Industries Today
Grasim Industries index presence
| NIFTY50 | NIFTYEQWGT | ALLCAP |
| NIFTY100 | BSE100 | MFG |
| NIFTY200 | BSE200 | S&PDIVSTABLE |
| NIFTY100WEIGHT | BSE500 | LOM250 |
| NIFTY500VAL50 | GREENEX | BASE100LARGECAPTMC |
| NIFTYADITYA | CARBONEX | NIFTYLGEMID250 |
| NIFTYCDTY | BASMTR | LRGCAP |
| NIFTYINFRAST | S&P LARGEMIDCAP |
Grasim Industries Infographics
Overview of Grasim Industries
Key Takeaway
- Current price of Grasim Industries stock is lower than Intrinsic value.
- Grasim industries stock offered lower return than fixed-deposites
- This stock did not offered good dividend returns in past.
- Grasim industries stocks does not come in ASM/GSM list. No red flags.
Key Metrics
| PE Ratio | Sector PE | PB Ratio | Sector PB | Dividend Yield | Sector Div Yld |
| 26.74 | 25.56 | 1.12 | 3.27 | 0.51% | 1.46% |
Key Takeaway
- Grasim industries stock have good PE ratio more than 26, which is great for investment decisions.
- Sector PE is more than 25.
- PB ratio is 1.12 and Sector PB ratio is more than 3 for Grasim Industries stock.
- Dividend yield is not too good for Grasim Industries stock.
Read more about PE ratio with infographics | Read more about dividend and dividend yield with infographics
Financials of Grasim Industries
Income statement of Grasim Industries
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Total Revenue | 57,024.02 | 78,057.00 | 76,734.46 | 77,876.45 |
| EBITDA | 12,022.27 | 14,794.87 | 17,448.80 | 19,765.77 |
| PBIT | 9,297.91 | 11,223.49 | 13,444.57 | 15,732.37 |
| PBT | 5,634.74 | 5,163.46 | 6,554.26 | 10,008.89 |
| Net Income | 2,678.58 | 1,692.99 | 4,411.74 | 4,304.82 |
| EPS | 43.63 | 25.75 | 67.08 | 65.43 |
| DPS | 6.2 | 7 | 4 | 9 |
| Payout ratio | 0.14 | 0.27 | 0.06 | 0.14 |
Key Takeaway
Income Statement
Higher than Industry Revenue Growth
Over the last 5 years, revenue has grown at a yearly rate of 17.12%, vs industry avg of 12.46%
Lower than Industry Net Income
Over the last 5 years, net income has grown at a yearly rate of 11.77%, vs industry avg of 19%
Increasing Market Share
Over the last 5 years, market share increased from 23.21% to 35.8%
A balance sheet of Adani Ports
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Current Assets | 40,309.16 | 49,880.57 | 51,445.38 | 57,458.55 |
| Non Current Assets | 1,67,589.50 | 1,91,246.41 | 1,92,736.06 | 2,09,392.32 |
| Total Assets | 2,07,898.66 | 2,41,126.98 | 2,44,181.44 | 2,66,850.87 |
| Current Liabilities | 42,521.96 | 48,765.45 | 46,618.95 | 52,009.90 |
| Non Current Liabilities | 81,621.75 | 1,03,770.27 | 1,06,614.17 | 1,12,268.13 |
| Total Liabilities | 1,24,143.71 | 1,52,535.72 | 1,53,233.12 | 1,64,278.03 |
| Total Equity | 83,754.95 | 88,591.26 | 90,948.32 | 1,02,572.84 |
| Total Liabilities & Shareholder’s Equity | 2,07,898.66 | 2,41,126.98 | 2,44,181.44 | 2,66,850.87 |
| Total Common Shares Outstanding | 65.74 | 65.76 | 65.78 | 65.81 |
Key Takeaway
Higher than Industry Debt to Equity Ratio
Over the last 5 years, the debt to equity ratio has been 73.34%, vs industry avg of 60.11%
Higher than Industry Current Ratio
Over the last 5 years, the current ratio has been 117.16%, vs industry avg of 111.29%
Cash Flow statement of Grasim industries
| Financial Year | FY 2018 | FY 2019 | FY 2020 | FY 2021 |
| Net Change in Cash | 855.5 | 287.04 | 1,838.33 | -446.32 |
| Changes in Working Capital | -14,596.17 | -15,941.86 | 1,997.09 | -4,598.64 |
| Capital Expenditures | 3,288.71 | 4,178.95 | 5,076.83 | 3,651.04 |
| Free Cash Flow | -7,428.61 | -5,837.53 | 11,543.47 | 11,049.84 |
Key Takeaway
Higher than Industry Free Cash Flow Growth
Over the last 5 years, free cash flow growth has been 28.99%, vs an industry avg of 23.49%
Peers of Grasim Industries
| Stock | PE Ratio | PB Ratio | Dividend Yield |
| Grasim Industries Ltd | 26.74 | 1.12 | 0.51% |
| UltraTech Cement Ltd | 39.05 | 4.83 | 0.50% |
| Shree Cement Ltd | 44.13 | 6.53 | 0.21% |
| Ambuja Cements Ltd | 34.31 | 2.79 | 4.40% |
Key Takeaway
- Grasim industries does not have good PE ratio then peers.
- Grasim industries have PB ratio of 1 and it is lower than its peer.
- Adani Port do not offer good dividend yield so it is very less than peer, just 0.51%
Promoter Holdings Trend
Institutional Holdings Trend
Total Promoter Holding
In last 6 months, promoter holding in the company has almost stayed constant
Low Pledged Promoter Holding
Pledged promoter holdings are insignificant
Mutual Fund Holding
In the last 3 months, the mutual fund holding of the company has almost stayed constant
Foreign Institutional Holding
In the last 3 months, foreign institutional holding of the company has almost stayed constant
| Investors | Sep-18 | Dec-18 | Mar-19 | Jun-19 | Sep-19 | Dec-19 | Mar-20 | Jun-20 | Sep-20 | Dec-20 | Mar-21 | Jun-21 |
| Promoters | 40.09 | 40.16 | 40.15 | 40.15 | 40.15 | 40.11 | 40.26 | 40.26 | 40.92 | 41.42 | 41.83 | 42.09 |
| FIIs | 23.51 | 21.16 | 20 | 18.26 | 16.97 | 15.98 | 13.52 | 12.66 | 12.55 | 12.96 | 14.44 | 15.1 |
| DIIs | 16.69 | 17.78 | 18.67 | 21.08 | 22.13 | 22.64 | 22.86 | 21.37 | 20.26 | 18.42 | 16.81 | 15.99 |
| Public | 19.71 | 20.7 | 20.97 | 20.3 | 20.54 | 21.06 | 23.15 | 25.5 | 26.07 | 26.99 | 26.72 | 26.62 |
| Others | 0 | 0.2 | 0.2 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.21 | 0.2 | 0.2 |
Key Takeaway
- The promotors are contastently kept on increasing their stakes in Grasim Industries. They have kept more than 42% investment in this stock
- FIIs(Foreign Institutional Investors) limited their stakes in Grasim Industries by 15% compared to year 2018
- Domestic institutional investors (DIIs) decreases their investments 16% to 15% in the year 2021.
- Whereas Public have increase their investment to 26%.
Dividend and Split
Dividends Table
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹5.00 | 12-Aug-21 |
| Cash Dividend | Dividend/Share | Ex Date |
| Special | ₹4.00 | 12-Aug-21 |
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹4.00 | 26-Aug-20 |
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹7.00 | 8-Aug-19 |
| Cash Dividend | Dividend/Share | Ex Date |
| Final | ₹6.20 | 31-Aug-18 |
Dividend Trend
No Trend In Dividends
GRASIM has shown an inconsistent dividend trend over the last 5 years
Dividend Yield
The current dividend yield is 0.51%. An investment of ₹1,000 in the stock is expected to generate a dividend of ₹5.14 every year
Key Takeaway
- Grasim industries company gave regular dividend from last 4 years.
- Maximum dividend of Rs.7 given by Grasim industries this year 2021.
Bonus/Split Table
| Demerger | Ratio | Ex Date |
| – | — | 19-Jul-17 |
| Share Split | Ratio | Ex Date |
| Face Value Change from 10 To 2 | 1:05 | 6-Oct-16 |
Key Takeaway
- Grasim industries company gave stock split 1:5 ratio in the year 2016
Read more about dividend and dividend yield with infographics | Stock split with infographics
Strength & Limitations
Strengths
- Company is virtually debt free.
- The company has an efficient Cash Conversion Cycle of 28.13 days.
- The company has a good cash flow management; CFO/PAT stands at 2.40.
Limitations
- The company has shown a poor profit growth of -20.02% for the Past 3 years.
- The company has shown a poor revenue growth of -2.47% for the Past 3 years.
- Company has a poor ROE of 2.22% over the past 3 years.
- Company has a poor ROCE of 3.29% over the past 3 years
- The company is trading at a high PE of 72.
Expert Forecast of Grasim Industries
High
₹1974
Median
₹1628
Low
₹586
Future stock price targets of Grasim Industries stock
| Target of Grasim Industries | Future Stock Price |
| 2022 | 1900 to 2200 |
| 2025 | 3500 to 3800 |
| 2030 | 4800 to 5000 |
| 2035 | 6500 to 7200 |
| 2040 | 9000 to 11000 |
Please Note
These stock forecast or stock predictions solely based on historical data and related estimates by industry experts. Please do take advice from certified people and then go for investment.
Here predictions are just data for your information. We here declare that the stock forecast team does not responsible for any price changes or the price does not go expected. At last, it is solely based on how the stock market is running at that certain conditions.
Stock Forecast Predictions
Grasim Industries stock is doing exceptionally well in terms of ratios.
This stock had a CAGR of more than 26% from the last 5 year and upto the mark for delivering in ratios.
Earnings per share (EPS) is 24.33
The price-to-earnings ratio is more than 72 from the last 5 years.
What if I invest in 10 stocks for the upcoming years? You will be happy by the return showing in the image above
These are future investment values are calculated based on a CAGR(Compound Annual Growth Rate) of 26%.
If this stock keeps CAGR average value for upcoming years, then look at the huge numbers
For my investment of Rs. 17520(10 Grasim industries stocks)
For the first year, I will be getting more than 20 Thousands
For the next 5 years, the Investment will be more than 55 Thousands
then for the next 10 years, the investment will touch more than 1.5L.
For the next 15 years, more than 5 Lacs will be the investment value.
and in the next 20 years, the investment will touch more than 18 Lacs.
Look at after 25 years number, they are huge. More than 57 L.
You must be laughing but CAGR with compounding giving this amazing result.
Read How Rs.10,000 converted into 1770 Crores Wipro case study?
Conclusion
Grasim Industries Ltd is among the best companies in Aditya Birla Group. It ranks in India’s largest private sector companies. If we overall look at Grasim Industries in terms of ratios, it is a wonderful opportunity for new investors. No doubt this stock will be multibagger in future. We highely recommond this stock.
Frequently Asked Questions
Ans: Grasim industries have Quality Earnings: GRASIM has high quality earnings. Growing Profit Margin: GRASIM’s current net profit margins (6.6%) are higher than last year (4.8%). It have high potential of growth in future. It is a best buy.
Ans: The company is a subsidiary of Aditya Birla Group. Grasim is the world’s largest producer of viscose rayon fiber with about 24% market share. Grasim Industries Ltd is among the best companies in Aditya Birla Group.
Ans: Grasim industries have Quality Earnings: GRASIM has high quality earnings. Growing Profit Margin: GRASIM’s current net profit margins (6.6%) are higher than last year (4.8%). It have high potential of growth in future. It is a best buy.
Ans: It is a leading global producer of Viscose Staple Fibre, the largest Chlor-Alkali, Linen and Insulators player in India. Through its subsidiaries, UltraTech Cement and Aditya Birla Capital, it is also India’s largest cement producer and a leading diversified financial services player.
Ans: Yes GRASIM is currently undervalued, it may be a great time to accumulate more of your holdings in the stock.
Ans: Grasim Industries Ltd., incorporated in the year 1947, is a Large Cap company (having a market cap of Rs 105154.26 Crore) operating in Diversified sector.
Ans: This company belongs to Material sector (Cement). It comes in Nifty 50, Nifty100, Nifty200, Nifty500 and Manufacturing sector in the index.
Ans: The Aditya birla is the Owner of Grasim industries. This company comes in Aditya Birla group.
Ans: Grasim is the parent company of UltraTech Cement and owns the UltraTech brand. Global giant Holcim runs its cement firms ACC and Ambuja Cement independently. In fact, these two companies which jointly form India s largest cement producing block compete with each other in the market place.
Ans: This company belongs to Material sector (Cement). It comes in Nifty 50, Nifty100, Nifty200, Nifty500 and Manufacturing sector in the index.
