Grasim Industries Q2 Review - Strong Demand Outlook, Margin Should Improve In H2 FY22: Motilal Oswal

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Motilal Oswal Report

Grasim Industries Ltd.’s Q2 FY22 operating profit was 7% below our estimate due to lower profits in the chemical segment (operating profit margin down 4.9% QoQ versus our estimate of a 1.3% improvement).

Volume/Ebitda was 10%/16% above our estimate. Grasim's management said the impact of price hikes will be felt in H2 FY22 and margin should improve in the chemical segment.

We have reduced our FY23E standalone Ebitda by 7% to factor in higher costs for the chemical business.

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