The research firm ICICI Securities believes earnings of apparel brands and retail companies under their coverage may surprise positively from Q3FY22E as the likely demand recovery may result in better than expected margin performance. Some of the costs savings achieved during pandemic may sustain and coupled with high operating leverage may lead to higher than pre-covid margins from Q3FY22E. Stocks like Trent, V-Mart and Aditya Birla Fashion and Retail are the preferred picks backed by their strong and consistent track record of execution.

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Sharekhan's research report on Grasim Industries

Grasim Industries Limited (Grasim) reported stellar performance for Q1FY2023, led by strong volume growth in VSF and historically high operating margins in its chemical and textile business verticals. The company reiterated its paints capex of Rs. 10,000 crore by FY2025, while it continues to expand its existing businesses especially the chemical division. Easing of VSF and caustic prices along with elevated input costs may put pressure on OPM in the near term. However, healthy demand and increasing value-added products would aid growth over the medium to long term.

Outlook

We retain Buy on Grasim with a PT of Rs. 1,881 factoring upwardly revised estimates and lower holding company discounts for its investments, especially in UltraTech, which has a strong growth outlook going ahead.

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Buy Grasim Industries; target of Rs 1881: Sharekhan

Sharekhan is bullish on Grasim Industries has recommended buy rating on the stock with a target price of Rs 1881 in its research report dated August 12, 2022.

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