GRASIM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.8
| Stock Code | GRASIM | Market Cap | 1,90,172 Cr. | Current Price | 2,794 ₹ | High / Low | 2,980 ₹ |
| Stock P/E | 493 | Book Value | 808 ₹ | Dividend Yield | 0.36 % | ROCE | 1.52 % |
| ROE | 0.35 % | Face Value | 2.00 ₹ | DMA 50 | 2,736 ₹ | DMA 200 | 2,746 ₹ |
| Chg in FII Hold | 0.42 % | Chg in DII Hold | -0.71 % | PAT Qtr | -127 Cr. | PAT Prev Qtr | 805 Cr. |
| RSI | 58.2 | MACD | 25.6 | Volume | 12,06,394 | Avg Vol 1Wk | 12,13,735 |
| Low price | 2,502 ₹ | High price | 2,980 ₹ | PEG Ratio | -8.17 | Debt to equity | 0.24 |
| 52w Index | 61.2 % | Qtr Profit Var | 24.8 % | EPS | 3.29 ₹ | Industry PE | 30.8 |
📊 Financials: GRASIM shows weak fundamentals with ROE at 0.35% and ROCE at 1.52%, reflecting poor efficiency. EPS at ₹3.29 is extremely low relative to price levels. Quarterly PAT fell sharply to -₹127 Cr. from ₹805 Cr., highlighting severe earnings volatility. Debt-to-equity at 0.24 indicates manageable leverage but profitability remains a concern.
💹 Valuation: Current P/E of 493 is far above the industry average of 30.8, suggesting severe overvaluation. PEG ratio of -8.17 highlights poor growth prospects. Book value of ₹808 vs. CMP ₹2,794 shows a steep P/B multiple, unjustified by fundamentals.
🏗️ Business Model: GRASIM operates in diversified businesses including cement, textiles, and financial services. While group synergies and sectoral exposure provide stability, weak profitability metrics undermine overall health.
📈 Entry Zone: Safer accumulation only near ₹2,650–₹2,680 (close to support levels). RSI at 58.2 indicates neutral momentum, while MACD at 25.6 shows mild bullishness. Exit strategy near ₹2,850–₹2,900 with strict stop-loss around ₹2,600.
🕰️ Long-Term Holding: Weak fundamentals, high valuation, and negative earnings make GRASIM unsuitable for conservative long-term holding. Best considered for speculative swing trades only.
Positive
- Strong book value (₹808) provides balance sheet support
- Incremental increase in FII holdings (+0.42%)
- Diversified business portfolio across multiple sectors
Limitation
- Extremely high P/E (493) vs. industry average (30.8)
- Negative PEG ratio (-8.17) signals poor growth outlook
- Weak ROE (0.35%) and ROCE (1.52%)
- Quarterly PAT loss (-₹127 Cr.)
- DII holdings decreased (-0.71%)
Company Negative News
- Sharp quarterly loss raises concerns about sustainability
- Valuation concerns with P/E far above peers
Company Positive News
- Incremental increase in FII holdings (+0.42%)
- Strong group diversification provides some stability
Industry
- Industry P/E at 30.8 reflects moderate valuations
- Peers show stronger fundamentals compared to GRASIM
Conclusion
GRASIM is financially weak with high valuation and negative earnings, making it unsuitable for long-term investors. Entry near ₹2,650–₹2,680 is only for speculative trades, with profit booking advised near ₹2,850–₹2,900 and strict stop-loss around ₹2,600. Long-term holding is not recommended due to poor fundamentals and earnings volatility.