Please refer to important disclosures at the end of this report
1
Grasim Industries Limited (Grasim), a flagship company of the Aditya Birla
Group. Grasim is a diversified company with cement and Viscose Staple Fibre
(VSF) being core business, accounting for 65% and 35% of revenues. Its othe
r
business includes chemicals and Textiles. Grasim is market leader in its operating
segments viz. Cement, VSF and Chemical. Its entire segment offers health
y
demand outlook. With significant capacity addition in both businesses and being
low cost producer, Grasim is well placed to capture the growth resulting in strong
earnings growth, cash flow generation and balance sheet strength. Aditya Birla
Nuvo - GRASIM merger will result in the listing of the merged financial services
business, which will be 57% owned by post-merger GRASIM and the balance b
y
its shareholders on a proportionate basis. Post Merger, Grasim will become one
of the largest and well diversified companies with healthy mix of business with
steady cash flow, which can be proxy for India growth story. VSF pricing is likel
y
to be stable in the longer term, as capacity addition is likely to be limited.
UTCEM is a preferred play on demand recovery due to market leadership, Pan
India presence and superior profitability. Hence Buy.
BUY
CMP `871
Stock Info
Sector
Beta 0.9
Bloomberg Code
Shareholding Pattern (%)
Promoters 31.3
MF / Banks / Indian Fls 23.5
FII / NRIs / OCBs 35.0
Indian Public / Others 10.2
Abs. (%) 3m 1yr 3yr
Sensex (4.5) 2.0 28.2
Grasim Industries (7.0) 16.5 63.5
Reuters Code GRAS.BO
2
BSE Sensex 26,653
Nifty 8,225
Face Value (
`
)
Textiles
Market Cap (
`
cr) 40,678
52 Week High / Low 1070/648
Avg. Daily Volume 18,220
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Grasim Industries
Others | Textiles
December 1, 2016
Grasim Industries | Textiles
December 1, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Grasim Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
< -15
)