Hold Grasim Industries, target price Rs 905: Emkay Global

Emkay Global has given a hold rating to Grasim with a target price of Rs 905. The share price moved down by 0.09 per cent from its previous close of Rs 842.55. The stock’s last traded price is Rs 841.80.

Grasim Industries Ltd., incorporated in the year 1947, is a Large Cap company (having a market cap of Rs 55456.77 Crore) operating in Diversified sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 18400.25 Crore, up 35.09 % from last quarter Sales of Rs 13621.10 Crore and down -.16 % from last year same quarter Sales of Rs 18430.27 Crore Company reported net profit after tax of Rs 1502.81 Crore in latest quarter.

Investment Rationale
The brokerage maintains Hold with a revised TP of Rs905, based on 4.5x Dec-22E EBITDA of the standalone business and assign a 50% HoldCo discount for its holding in subsidiaries. The downside risk could be any fund infusion in VIL or a decline in VSF demand/prices.

Promoter/FII Holdings
Promoters held 40.9 per cent stake in the company as of Sept 30, 2020, while FIIs held 12.6 per cent, DIIs 20.3 per cent and public and others 26.3 per cent.