NSEI:GRASIM

Stock Analysis Report

Executive Summary

Grasim Industries Limited manufactures and sells of viscose staple fiber and fiber yarn, chemical and allied products, fertilizers, textiles, insulators, and cement and cement related products in India and internationally.

Rewards

PE ratio (8.9x) is below the Indian market (9.6x)

Earnings are forecast to grow 11.1% per year

Earnings grew by 262.5% over the past year

Risk Analysis

Interest payments are not well covered by earnings

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record, good value and pays a dividend.


Similar Companies

Share Price & News

How has Grasim Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: GRASIM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.4%

GRASIM

5.2%

IN Basic Materials

9.3%

IN Market


1 Year Return

-37.5%

GRASIM

-27.2%

IN Basic Materials

-24.1%

IN Market

Return vs Industry: GRASIM underperformed the Indian Basic Materials industry which returned -29.6% over the past year.

Return vs Market: GRASIM underperformed the Indian Market which returned -26.5% over the past year.


Shareholder returns

GRASIMIndustryMarket
7 Day11.4%5.2%9.3%
30 Day-16.4%-20.6%-12.6%
90 Day-29.8%-28.4%-24.1%
1 Year-36.9%-37.5%-26.7%-27.2%-22.6%-24.1%
3 Year-48.5%-49.5%-26.2%-27.5%-10.9%-15.8%
5 Year-26.7%-28.9%0.3%-2.9%0.3%-4.9%

Price Volatility Vs. Market

How volatile is Grasim Industries's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Grasim Industries undervalued compared to its fair value and its price relative to the market?

8.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: GRASIM (₹530.55) is trading above our estimate of fair value (₹81.43)

Significantly Below Fair Value: GRASIM is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: GRASIM is good value based on its PE Ratio (8.9x) compared to the Basic Materials industry average (10.2x).

PE vs Market: GRASIM is good value based on its PE Ratio (8.9x) compared to the Indian market (9.6x).


Price to Earnings Growth Ratio

PEG Ratio: GRASIM is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: GRASIM is good value based on its PB Ratio (0.6x) compared to the IN Basic Materials industry average (0.6x).


Next Steps

Future Growth

How is Grasim Industries forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: GRASIM's forecast earnings growth (11.1% per year) is above the savings rate (6.5%).

Earnings vs Market: GRASIM's earnings (11.1% per year) are forecast to grow slower than the Indian market (19.5% per year).

High Growth Earnings: GRASIM's earnings are forecast to grow, but not significantly.

Revenue vs Market: GRASIM's revenue (10% per year) is forecast to grow faster than the Indian market (8.8% per year).

High Growth Revenue: GRASIM's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: GRASIM's Return on Equity is forecast to be low in 3 years time (6%).


Next Steps

Past Performance

How has Grasim Industries performed over the past 5 years?

9.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: GRASIM has high quality earnings.

Growing Profit Margin: GRASIM's current net profit margins (6.3%) are higher than last year (1.9%).


Past Earnings Growth Analysis

Earnings Trend: GRASIM's earnings have grown by 9.1% per year over the past 5 years.

Accelerating Growth: GRASIM's earnings growth over the past year (262.5%) exceeds its 5-year average (9.1% per year).

Earnings vs Industry: GRASIM earnings growth over the past year (262.5%) exceeded the Basic Materials industry 21.9%.


Return on Equity

High ROE: GRASIM's Return on Equity (7%) is considered low.


Next Steps

Financial Health

How is Grasim Industries's financial position?


Financial Position Analysis

Short Term Liabilities: GRASIM's short term assets (₹487.1B) exceed its short term liabilities (₹461.2B).

Long Term Liabilities: GRASIM's short term assets (₹487.1B) do not cover its long term liabilities (₹999.2B).


Debt to Equity History and Analysis

Debt Level: GRASIM's debt to equity ratio (98.8%) is considered high.

Reducing Debt: GRASIM's debt to equity ratio has increased from 34% to 98.8% over the past 5 years.

Debt Coverage: GRASIM's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: GRASIM's interest payments on its debt are not well covered by EBIT (2.2x coverage).


Balance Sheet


Next Steps

Dividend

What is Grasim Industries's current dividend yield, its reliability and sustainability?

1.32%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: GRASIM's dividend (1.32%) is higher than the bottom 25% of dividend payers in the Indian market (0.89%).

High Dividend: GRASIM's dividend (1.32%) is low compared to the top 25% of dividend payers in the Indian market (3.79%).


Stability and Growth of Payments

Stable Dividend: GRASIM's dividend payments have been volatile in the past 10 years.

Growing Dividend: GRASIM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (11.8%), GRASIM's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: GRASIM's dividends in 3 years are forecast to be well covered by earnings (20.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.7yrs

Average board tenure


CEO

Dilip Gaur (62yo)

4s

Tenure

₹65,455,000

Compensation

Mr. Dilip Singh Gaur has been Managing Director, Business Head of Fibre & Pulp, Director at Grasim Industries Limited since April 1, 2016. Mr. Gaur serves as Chief Executive Officer and Business Director o ...


CEO Compensation Analysis

Compensation vs Market: Dilip's total compensation ($USD861.57K) is about average for companies of similar size in the Indian market ($USD755.68K).

Compensation vs Earnings: Dilip's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Dilip Gaur
MD, Business Head of Fibre & Pulp and Director4yrs₹65.46mno data
Atul Daga
CFO & Whole-Time Director of UltraTech Cement Limitedno datano datano data
Thomas Connelly
Independent Director9.67yrs₹1.40mno data
Cyril Shroff
Independent Director19.75yrs₹1.29m0.000050% 168.6k
Kumar Birla
Non-Executive Chairman25.25yrs₹133.36m0.13% 445.1m
Shailendra Jain
Non-Executive Director10yrs₹2.26m0.010% 33.6m
Rajashree Birla
Non Executive Director24.08yrs₹12.64m0.084% 283.4m
Arun Thiagarajan
Independent Director3.92yrs₹3.35m0.00022% 741.8k
Om Rungta
Independent Director5.58yrs₹2.00m0.000040% 134.9k
N. Mohanraj
Non-Executive Independent Director0.75yr₹1.37mno data

9.7yrs

Average Tenure

66.5yo

Average Age

Experienced Board: GRASIM's board of directors are considered experienced (9.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: GRASIM insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 24.8%.


Top Shareholders

Company Information

Grasim Industries Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Grasim Industries Limited
  • Ticker: GRASIM
  • Exchange: NSEI
  • Founded: 1947
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: ₹337.188b
  • Shares outstanding: 657.80m
  • Website: https://www.grasim.com

Location

  • Grasim Industries Limited
  • Birlagram
  • Nagda
  • Madhya Pradesh
  • 456331
  • India

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
GRASIMNSEI (National Stock Exchange of India)INR2ININRNo data
500300BSE (Mumbai Stock Exchange)INR2ININRNo data
GRA92BDL (Bourse de Luxembourg)GDR EACH REPR 1 ORD SHARE (SPON)144ALUUSDMay 1993
500300BSE (Mumbai Stock Exchange)YesEquity SharesININRNov 1994
GRASIMNSEI (National Stock Exchange of India)YesEquity SharesININRNov 1994
GRSX.YOTCPK (Pink Sheets LLC)GDR(EACH REP 1 INR10)LEVEL I SPONSUSUSDJan 2000
GRA99BDL (Bourse de Luxembourg)GDR(EACH REP 1 INR10)LEVEL I SPONSLUUSDJan 2000

Biography

Grasim Industries Limited manufactures and sells of viscose staple fiber and fiber yarn, chemical and allied products, fertilizers, textiles, insulators, and cement and cement related products in India and internationally. The company offers viscose staple fiber, a man-made biodegradable fiber for use in apparels, home textiles, dress materials, knitted wear products, and non-woven applications; and rayon grade and wood pulp products; textile products that include linen and wool. It also provides grey cement; white cement under the Birla White brand; ready mix concrete; and putty. In addition, the company offers caustic soda, anhydrous aluminum chloride, chlorosulphonic acid, and polyaluminium chloride. Further, it provides stable bleaching powder under the Vikram, Shaktiman, and Lion brands for use in water treatment, as well as the textiles, pulp and paper, and carpet industries; and calcium chloride that is used in the oil industry and cement paint manufacturing, as well as epoxy products. Additionally, the company retails linen under the Linen Club Fabrics brand; and offers life insurance, asset management, private equity, corporate lending, structured finance, general insurance broking, wealth management, equity, currency and commodity broking, online personal finance management, housing finance, pension fund management, and health insurance services, as well as urea’s, fertilizers, seeds, agrochemicals, bio stimulants, and insulators. It is also involved in solar power designing, engineering, procurement, and commissioning businesses. The company was incorporated in 1947 and is based in Nagda, India. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/09 13:02
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.