GRASIM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.0

🧾 Core Financials & Return Metrics

EPS (₹54.5) with PAT at ₹1,521 Cr. suggests solid absolute profits, yet Qtr variation (-3.01%) flags softness in growth.

ROCE (7.5%) & ROE (3.95%): Underwhelming — GRASIM’s capital efficiency is far below desirable levels for a giant diversified conglomerate.

Debt-to-Equity (1.91) — heavily leveraged, raises caution on interest cost and long-term debt servicing.

Dividend Yield (0.36%) — nominal; not attractive for passive income seekers.

Despite size and revenue strength, returns on capital and equity are too weak to justify high valuations.

🧮 Valuation Metrics

Metric Value Interpretation

P/E Ratio 50.8 In line with industry (51.1), but demands growth

P/B Ratio ~1.91 Reasonable given book value strength

PEG Ratio -2.42 Not meaningful — negative PEG distorts valuation signal

Intrinsic Value — Estimated range ₹2,550–₹2,650 — currently fully valued

Current price implies no clear undervaluation; wait-and-watch warranted unless earnings momentum reappears.

🏢 Business Model & Strategic Profile

Segments: Cement (via UltraTech), viscose, chemicals, paints, financials (Aditya Birla Capital).

Strengths

Part of the Aditya Birla Group — strong brand, large asset base, diversified risk.

Entry into paints segment — potential disruptor in high-margin space.

Concerns

Low ROE/ROCE across verticals — management efficiency must improve.

High gearing — balance sheet pressure may restrict expansion.

Institutional flows mixed — FII ↑ 0.34%, DII ↓ 0.33%, showing divided outlook.

📉 Technical Indicators & Entry Strategy

Current Price: ₹2,743

DMA 50 / DMA 200: ₹2,727 / ₹2,615 — hovering above trend supports

RSI (49.3): Neutral zone — lack of momentum

MACD (-5.44): Bearish — signals possible cooling phase

Volume slightly above average — interest building despite neutral sentiment

🛒 Suggested Entry Zone: ₹2,550–₹2,650 Ideal for accumulation only after MACD reversal and RSI climbs beyond 55. Don’t chase the peak unless ROE trends higher.

🔭 Long-Term Investment Perspective

Business transformation — paint segment, digital ventures, and financial streamlining — could unlock future value.

Watch for sustained EPS growth and ROCE crossing 10% as signs of genuine turnaround.

Best held in diversified portfolios to buffer cyclicality and leverage risk.

Thinking about holding alongside UltraTech, Asian Paints or Aditya Birla Capital? I can break down cross-hold synergies or comparative valuations next if you'd like to zoom in. 🧠📊 Let’s spotlight potential hidden gems.

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