Motilal Oswal - Grasim Industries Ltd. (500300) MOSL: GRASIM INDUSTRIES (Neutral)-Gaining scale via capacity addition-Value-added products to drive margin improvement

Report

Motilal Oswal

MOSL: GRASIM INDUSTRIES (Neutral)-Gaining scale via capacity addition-Value-added products to drive margin improvement

Grasim Industries: Gaining scale via capacity addition; Value-added products to drive margin improvement

(GRASIM IN, Mkt Cap USD10.7b, CMP INR1059, TP INR1187, 12% Upside, Neutral)

Grasim Industries (GRASIM) is likely to gain scale in the VSF (increasing capacity by ~58% over FY18-21) and Chemicals (increasing capacity by ~37% over FY17-19) segments by way of capacity addition.
VSF demand in India is likely to grow at ~8% over FY17-22 – around 200bp higher than the global growth rate – due to initiatives undertaken by GRASIM (e.g. ingredient branding in the form of ‘LIVA’).
VSF commands a stable margin owing to the rising proportion (38%) of high-margin specialty fiber in its portfolio and the increasing share of domestic sales (at 77%).
Strong integration, along with access to key raw materials like dissolving grade pulp, caustic soda and power, is expected to ensure a stable cost curve for VSF.
Higher integration in chlorine is expected to drive a healthy margin profile for the Chemicals segment. Additionally, higher investments in chemical plants, which are in proximity to the consumption center of chlorine, should improve ECU realizations.

05/04/2018 10 EN

Underlying

Grasim Industries Ltd.

See profile

INE047A01013 India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

See profile

Other Reports on these Companies

Motilal Oswal

MOSL: GRASIM INDUSTRIES (Neutral)-Margin improvement led by chemicals segment

Grasim Industries: Margin improvement led by chemicals segment (GRASIM IN, Mkt Cap USD8.2b, CMP INR1127, TP INR1242, 10% Upside, Neutral) Strong ECU realization drives profits: Standalone 3QFY18 revenue came in at INR44b (est. of INR30.2b), led by a healthy performance from the chemicals business. EBITDA stood at INR8.7b (est. of INR7.8b), with PAT of INR4.7b (est. of INR4.7b). Tax rate was 35% v/s 31% in 3QFY17. VSF – margins contract on account of cost push: Volumes increased 9% YoY on a like-to-like basis, led by strong domestic demand (77% of total sales). VSF margin shrunk 1pp Qo...

February 15, 2018 February 15, 2018 8 EN

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality (HOMEFIRS IN, Mkt Cap USD0.9b, CMP INR802, TP INR1025, 28% Upside, Buy) HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ, led by investments in new branches and resultant higher employee expenses. Disbursements grew 36%...

EUR 120.00

October 21, 2022 October 21, 2022 12 EN

Aliasgar Shakir

Aliasgar Shakir

MOSL : SHOPPERS STOP: Ticking the right boxes

. SHOPPERS STOP: Ticking the right boxes (SHOP IN, Mkt Cap USD1b, CMP INR780, TP INR805, 3% Upside, Neutral) Aided by price hikes, SHOP reported a healthy 19% revenue growth in 2QFY23 from pre-COVID levels (8% beat) on healthy (+10%) SSSG and sustained volumes. EBITDA grew 2.3x YoY (22% over pre-COVID levels), with a 540bp margin improvement. 1) A strong recovery in revenue, backed by an improved pricing; 2) expansion within the Beauty and Private Label segment; and 3) healthy annual 12/15 store additions for SHOP/Beauty are expected to drive business growth going forward. We expect a r...

EUR 120.00

October 21, 2022 October 21, 2022 13 EN

Tushar Manudhane

Tushar Manudhane

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities (ERIS IN, Mkt Cap USD1.2b, CMP INR708, TP INR860, 21% Upside, Buy) Eris Lifesciences (ERIS) delivered better than expected 2QFY23 performance, led by superior traction in new launches and improved operating leverage. ERIS is notonly sustaining the momentum in its recently launched products, but it is also preparing itself for an aggressive pace of new introductions. We reiterate our earnings estimate for FY23/FY24 and continue to value ERIS at 22x 12M forward earnings to arrive at a price target of INR860. We re...

EUR 120.00

October 21, 2022 October 21, 2022 11 EN

Sign-up for free to access full reports immediately

Email Address*

Choose Password* ( 6 or more characters )

Due to regulatory restrictions regarding the distribution of financial research, this report is restricted to a specific region or investor type. Get access to exclusive reports by answering the questions below.

Select your country*

Get financial insights straight to your inbox

By clicking "register" you accept the Terms and Conditions & Privacy Policy

Already on ResearchPool?

Almost there...

Are you a professional investor?

Select your country

REGISTER

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

In order to access this report please create an account.

LOGIN

MOSL: GRASIM INDUSTRIES (Neutral)-Gaining scale via capacity addition-Value-added products to drive margin improvement

MOSL: GRASIM INDUSTRIES (Neutral)-Margin improvement led by chemicals segment

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

Create a free ResearchPool account to access full reports, get a personalised dashboard and follow providers or companies

Sign-up for free to access full reports immediately

ResearchPool Subscriptions

Get the most out of your insights

Why subscribe?

How to subscribe

ResearchPool Subscriptions

This report is only available to subscribers

Why subscribe?

How to subscribe