NSE Symbol: GRASIM | BSE Code: 500300
Grasim Industries Limited is a manufacturing company in India that primarily operates in VSF, textiles, cement, and chemicals. It is headquartered in Mumbai, Maharashtra. It has been a part of the Aditya Birla Group that runs across four continents in more than ten countries.
In 1947, the Grasim Industries Limited was established, and in 1950, the company began the production of fabric in Gwalior. Over the course of next couple of decades, Grasim entered the VSF segment by setting up plants in Nagda, Madhya Pradesh, and Harihar, Karnataka. Right around the same time, Grasim also branched into chemicals by starting caustic soda production in Nagda. In the early 2000s, Grasim diversified further and acquired a 10% stake in Larsen & Toubro Cement Limited, and soon followed it with buying a controlling stake in the same. Subsequently, the name of the acquired entity was changed to UltraTech Cement.
Mr. Kumar Mangalam Birla - Chairman, Aditya Birla Group
Mr. Birla has played a crucial role in making Aditya Birla Group one of the largest multinational conglomerates in India. He took charge of the Group in 1995 at the young age of 28 owing to the untimely demise of his father. In the 20 odd years that he has led the company, Mr. Birla has not the only paved the way for its businesses to dominate the sectors in which they operate, but he has also significantly enhanced the stakeholder value. Furthermore, he has been instrumental in improving the Group's global footprint through more than 30 acquisitions in India and worldwide.
Mr. Birla has received several awards over his illustrious career, a few of which are the International Advertising Association's 'CEO of the Year Award' in 2016 and the 'Global Leadership Award' in 2014, awarded by the US India Global Leadership Council.
Along with working as the Chairman of the Aditya Birla Group, Mr. Birla is also the chancellor of the Birla Institute of Technology & Science, and the chairman of the IIT, Delhi.
Dilip Gaur - Managing Director, Grasim Industries Limited
Mr. Gaur has been a part of the Aditya Birla Group since February 2008, when joined the Group's subsidiary Hindalco Industries Limited as the Group Executive President and Head of its Copper Business. After serving in this capacity for a little over six years, he became the Deputy Managing Director and Business Head of the UltraTech Cement Limited. This was his last stint before becoming the MD of the Grasim Industries Limited. Mr. Gaur is an alumnus of Harvard Business School.
On January 1, 2018, Grasim stocks commenced trading at Rs.1,165 on NSE. By mid-January, the share price had crossed Rs.1,200 driven by company updates. The Grasim share price was back in Rs.1,100 levels at the month end and the closing price on January 31, 2018, was Rs.1,160.
In early February, Grasim shares entered the Rs.1,000 territory owing to weak worldwide cues and turbulence in markets across the world. The shares recovered slightly after that and crossed Rs.1,100 again driven by a decent performance in the third quarter. The price at month end was Rs.1,152 on NSE, which in comparison to the start of the month, is not a significant loss.
Grasim's consolidated revenue from operations in the third quarter of the FY18 increased by 78% Year On Year to a Rs.15,291 crore. More than 50% of this revenue came from cement, with other significant contributors being Viscose and financial services.
Similarly, the consolidated EBITDA also improved by 44% over the corresponding quarter last year, with the figure for Q3 FY18 being Rs.2,696 crore. The company's net worth as of December 31, 2017, is Rs.57,157 crore with a debt-equity ratio of 0.27.
The consolidated profit after tax (PAT) decreased by 17% over the previous quarter. However, its standalone performance was exceptionally well for the quarter, considering that the PAT increased by 12% Y-o-Y and 43% Q-o-Q, to Rs.1,396 crore and Rs.474 crore respectively.
The September-December quarter also saw a 9% Y-o-Y improvement in VSF sales volume. However, it was the cement segment that outperformed the rest by registering a 33% growth in sales volume driven primarily by the boost in infrastructure and affordable housing space in India.
The market cap of Grasim Industries Limited, as of March 2018, is more than Rs.72,000 crore.
Grasim Industries Limited is the premier company of the famed Aditya Birla Group and has business interests in various segments such as textiles, cement, retail, and chemicals. It is also one of the world's largest producers of VSF with a 9% global share. Secondly, Grasim is heavily involved in the cement industry through its subsidiary UltraTech Cement Limited which dominates the cement sector in the Indian market. These two businesses together account for more than 80% of its revenues.
This organization is already a prominent player in the VSF segment and is well on the path to ramp up its capacity. Its sales volume over the course of the last two years has increased by more than 20% owing to its expansions at Vilayat and Harihar. Needless to mention, the company is strategically placed to meet the VSF demand in domestic and international markets. The same can be said for its cement business too. UltraTech's position as the market leader in the cement industry has positioned it well to meet rising demand for cement, driven primarily by the boost in infrastructure and affordable housing sectors.
As the company is a part of the Aditya Birla Group, it goes without saying that it is built on firm foundations. It has also generated steady revenues over the years and has performed well financially in comparison to its peers. Grasim stocks are fundamentally good to hold for an extended period, although it is advisable to consult your financial planner and carry out thorough research before investing.
A lot of research and knowledge is required in stock market investments, and generally, they don't offer any tax benefits. Hence at mymoneykarma, we merely motivate our readers to invest in mutual funds. Investing in mutual funds doesn't require a lot of knowledge, and equity-linked mutual fund schemes also provide tax benefits. In addition to it, since mutual funds contain stocks from multiple companies, they help in building a diversified portfolio.
Note: The contents of this post/blog do not constitute any professional advice on a specific financial matter.
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