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Last Updated on: 24 November, 2024
Author: Getaka|Social: Getaka Financial Services X (Earlier Twitter) Profile Getaka Financial Services LinkedIn Logo
Stock Ticker - BSE: 500300 | NSE: GRASIM

Grasim Industries Ltd: Intrinsic Value and Fundamental Analysis

Share Price and Basic Stock Data

Last Updated: November 22, 2024, 11:14 pm

Market Cap 1,74,768 Cr.
Current Price 2,599
High / Low2,878/1,938
Stock P/E37.3
Book Value 1,411
Dividend Yield0.38 %
ROCE9.30 %
ROE6.90 %
Face Value 2.00
PEG Ratio8.49

Stock P/E, Current Price, and Intrinsic Value Over Time

View Share Price Target for Grasim Industries Ltd

Competitors of Grasim Industries Ltd

Stock NameMarket CapCurrent PriceHigh / LowStock P/EBook ValueDividend YieldROCEROEFace Value
Bheema Cements Ltd 77.1 Cr. 23.635.3/21.0 13.20.00 %11.8 %56.4 % 10.0
UltraTech Cement Ltd 3,28,376 Cr. 11,37512,138/8,54450.0 2,1260.62 %15.1 %12.2 % 10.0
The Ramco Cements Ltd 22,341 Cr. 9451,058/70081.0 3020.26 %8.17 %5.63 % 1.00
The India Cements Ltd 11,039 Cr. 356386/173 1700.00 %0.78 %4.81 % 10.0
Star Cement Ltd 7,260 Cr. 180256/16236.7 67.90.00 %16.5 %11.5 % 1.00
Industry Average32,919.68 Cr1,789.9635.16530.040.62%11.13%16.10%7.13

All Competitor Stocks of Grasim Industries Ltd

Quarterly Result

MonthJun 2021Sep 2021Dec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024
Sales19,91922,56724,40228,81128,04227,48628,63833,46231,06530,22131,96537,72733,861
Expenses14,59617,67219,53123,47022,05922,89423,77527,33224,70824,17325,07329,83527,156
Operating Profit5,3234,8964,8715,3415,9834,5914,8636,1316,3576,0486,8937,8926,705
OPM %27%22%20%19%21%17%17%18%20%20%22%21%20%
Other Income4423942315812212542,972308296285256-48365
Interest1,2661,1761,1461,1881,2461,3731,6081,8162,0322,2262,4332,5862,725
Depreciation9911,0171,0261,1281,0891,1161,1391,2071,1831,2451,2441,3291,368
Profit before tax3,5083,0972,9313,6063,8692,3565,0873,4153,4382,8623,4723,9282,976
Tax %30%34%9%-13%29%36%12%31%25%29%25%31%24%
Net Profit2,4482,0322,6554,0702,7591,5094,4552,3562,5762,0242,6032,7222,268
EPS in Rs24.5219.9825.6640.8228.4214.8336.9720.1223.1717.1022.2520.8018.34

Last Updated: Unknown

Quarterly Chart

Profit & Loss - Annual Report

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024TTM
Sales27,90928,33131,73434,48736,06855,89477,20068,25276,40495,701117,627130,978133,774
Expenses21,98623,41626,59028,57628,68244,28160,56057,88057,76975,27096,038103,783106,237
Operating Profit5,9244,9155,1445,9117,38711,61216,64010,37318,63520,43121,58927,19527,537
OPM %21%17%16%17%20%21%22%15%24%21%18%21%21%
Other Income8245765301,3201,076410-1,8467,0761,1301,6483,733783857
Interest3244476677187023,6636,0606,8905,7234,7766,0449,2779,970
Depreciation1,2521,4571,5631,8341,8082,7243,5714,0044,0334,1614,5525,0015,187
Profit before tax5,1713,5863,4434,6795,9525,6355,1636,55410,00913,14314,72713,70013,238
Tax %28%20%30%26%29%35%47%-1%30%15%25%28%
Net Profit3,7782,9542,5823,4554,2463,6882,7456,6396,98711,20611,0789,9269,617
EPS in Rs56.9943.6636.7551.1565.6439.4324.9164.9063.30110.96100.3385.4278.49
Dividend Payout %8%9%9%9%8%15%27%6%14%9%10%12%

Profit & Loss Yearly Chart

YoY Net Profit Growth

Year2013-20142014-20152015-20162016-20172017-20182018-20192019-20202020-20212021-20222022-20232023-2024
YoY Net Profit Growth (%)-21.81%-12.59%33.81%22.89%-13.14%-25.57%141.86%5.24%60.38%-1.14%-10.40%
Change in YoY Net Profit Growth (%)0.00%9.22%46.40%-10.92%-36.04%-12.43%167.43%-136.62%55.14%-61.53%-9.26%

Grasim Industries Ltd has shown an inconsistent trend in YoY Net Profit Growth (%) in the last 11 years from 2013-2014 to 2023-2024.

Growth

Compounded Sales Growth
10 Years:17%
5 Years:11%
3 Years:20%
TTM:11%
Compounded Profit Growth
10 Years:12%
5 Years:18%
3 Years:9%
TTM:-29%
Stock Price CAGR
10 Years:17%
5 Years:27%
3 Years:14%
1 Year:34%
Return on Equity
10 Years:8%
5 Years:8%
3 Years:9%
Last Year:7%

Last Updated: Unknown

Balance Sheet

Last Updated: Unknown

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Equity Capital9292929393131132132132132132133
Reserves19,56521,52323,04827,33631,29457,23057,88856,50165,36275,56778,61088,520
Borrowings9,5509,68111,93012,5059,21367,07084,48784,77779,07874,744103,039137,155
Other Liabilities14,91616,44118,96319,64222,14783,46798,620102,772122,777138,706155,042186,309
Total Liabilities44,12347,73654,03359,57662,747207,899241,127244,181267,349289,149336,823412,116
Fixed Assets20,56125,20931,82834,27134,78669,25787,12987,73685,02388,99694,896100,494
CWIP6,0844,0452,7551,7881,2972,2902,7663,9045,7696,6157,77818,358
Investments8,0117,6117,25510,60114,20065,99562,74766,33788,01796,766105,355129,306
Other Assets9,46710,87212,19412,91612,46470,35688,48486,20488,54096,771128,793163,959
Total Assets44,12347,73654,03359,57662,747207,899241,127244,181267,349289,149336,823412,116

Reserves and Borrowings Chart

Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Cash from Operating Activity +4,2423,5494,5945,8687,288-4,140-1,65916,62015,0757,038-12,685-10,719
Cash from Investing Activity +-5,687-2,336-2,359-4,515-3,5091,546-2,212-11,364-7,146-1,053-13,712-23,114
Cash from Financing Activity +1,348-1,046-2,278-1,365-3,7993,4494,158-3,418-8,003-6,73326,46933,908
Net Cash Flow-97168-42-11-208562871,838-75-7487275

Free Cash Flow

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Free Cash Flow-4.00-5.00-6.00-7.00-2.00-56.00-68.00-74.00-61.00-54.00-82.00-110.00

Free Cash Flow = Income Generated from Operational Activities - Borrowings - Capital Work in Progress (CWIP)

Consistent positive free cash flow is crucial for businesses as it indicates their ability to generate cash from their core operations. It provides financial flexibility, allowing companies to invest in growth opportunities, pay dividends to shareholders, reduce debt, and weather economic downturns more effectively.

Free Cash Flow Chart

Financial Efficiency Indicators

MonthMar 2013Mar 2014Mar 2015Mar 2016Mar 2017Mar 2018Mar 2019Mar 2020Mar 2021Mar 2022Mar 2023Mar 2024
Debtor Days283230323034323121211819
Inventory Days221209207168163170154179179200180194
Days Payable16916010297117146133172229239216221
Cash Conversion Cycle808213610376585338-29-18-17-7
Working Capital Days421-8-19-73935-1817143346
ROCE %15%10%9%11%13%10%8%8%9%9%10%9%

Financial Efficiency Indicators Chart

Share Holding Pattern

MonthDec 2021Mar 2022Jun 2022Sep 2022Dec 2022Mar 2023Jun 2023Sep 2023Dec 2023Mar 2024Jun 2024Sep 2024
Promoters42.54%42.76%42.76%42.75%42.75%42.75%42.75%42.75%42.75%43.05%43.05%43.11%
FIIs12.81%12.71%11.49%12.03%12.58%12.45%12.29%12.17%12.52%12.70%13.69%13.78%
DIIs14.71%14.43%15.35%16.86%16.48%16.82%16.82%16.90%16.70%16.69%16.66%17.75%
Public29.68%29.87%30.18%28.06%27.88%27.69%27.82%27.80%27.69%27.24%26.29%25.04%
Others0.25%0.23%0.22%0.28%0.31%0.30%0.30%0.35%0.33%0.31%0.30%0.31%
No. of Shareholders2,51,4222,62,6502,79,5202,57,3552,47,0652,47,2652,43,2652,39,7802,34,4462,52,3172,53,6712,65,202

Shareholding Pattern Chart

No. of Shareholders

Mutual Fund Holdings

Fund NameNo of SharesAUM (%)Amount Invested (Cr)Previous Number of SharesPrevious DatePercentage Change
SBI Large & Midcap Fund2,010,0502.04558.14658,1982024-11-22205.39%
Franklin India Flexi Cap Fund1,592,1082.54442.09658,1982024-11-22141.89%
Nippon India ETF Nifty 50 BeES1,036,0320.93287.68658,1982024-11-2257.4%
SBI Contra Fund1,000,0000.73277.68658,1982024-11-2251.93%
ICICI Prudential Multi Asset Fund993,5380.59275.88658,1982024-11-2250.95%
SBI Flexi Cap Fund880,2751.07244.43658,1982024-11-2233.74%
ICICI Prudential Large & Mid Cap Fund753,6611.33209.27658,1982024-11-2214.5%
Kotak Equity Arbitrage Fund - Regular Plan737,5000.4204.79658,1982024-11-2212.05%
Quant ELSS Tax Saver Fund683,0001.71189.65658,1982024-11-223.77%
Franklin India ELSS Tax Saver Fund658,1982.59182.77658,1982024-11-220%

ROCE Trend

EPS Trend

Key Financial Ratios

MonthMar 24Mar 23Mar 22Mar 21Mar 20
FaceValue2.002.002.002.002.00
Basic EPS (Rs.)85.29103.98114.9865.5767.22
Diluted EPS (Rs.)85.29103.88114.9865.5067.18
Cash EPS (Rs.)223.47234.22227.66164.59153.25
Book Value[Excl.RevalReserv]/Share (Rs.)2092.451866.801764.721558.521382.40
Book Value[Incl.RevalReserv]/Share (Rs.)2092.451866.801764.721558.521382.40
Revenue From Operations / Share (Rs.)1972.571786.561453.761160.971142.30
PBDIT / Share (Rs.)428.60382.76322.84299.08277.13
PBIT / Share (Rs.)353.28313.63259.63237.78216.26
PBT / Share (Rs.)204.99220.50186.03145.6290.14
Net Profit / Share (Rs.)148.15165.09164.45103.3092.37
NP After MI And SOA / Share (Rs.)84.71103.69114.6965.4267.07
PBDIT Margin (%)21.7221.4222.2025.7624.26
PBIT Margin (%)17.9017.5517.8520.4818.93
PBT Margin (%)10.3912.3412.7912.547.89
Net Profit Margin (%)7.519.2411.318.898.08
NP After MI And SOA Margin (%)4.295.807.885.635.87
Return on Networth / Equity (%)6.348.679.976.577.79
Return on Capital Employeed (%)7.327.717.387.277.19
Return On Assets (%)1.362.022.601.611.80
Long Term Debt / Equity (X)0.970.840.610.801.04
Total Debt / Equity (X)1.521.290.960.951.25
Asset Turnover Ratio (%)0.340.150.120.080.11
Current Ratio (X)0.931.361.431.601.49
Quick Ratio (X)0.781.201.271.481.35
Inventory Turnover Ratio (X)3.612.492.611.622.19
Dividend Payout Ratio (NP) (%)11.689.637.846.1012.30
Dividend Payout Ratio (CP) (%)6.185.775.053.146.45
Earning Retention Ratio (%)88.3290.3792.1693.9087.70
Cash Earning Retention Ratio (%)93.8294.2394.9596.8693.55
Interest Coverage Ratio (X)3.074.174.453.442.65
Interest Coverage Ratio (Post Tax) (X)2.122.813.172.212.08
Enterprise Value (Cr.)332695.83249289.17219817.67190182.63132619.90
EV / Net Operating Revenue (X)2.542.122.302.491.76
EV / EBITDA (X)11.699.8910.349.667.27
MarketCap / Net Operating Revenue (X)1.160.911.151.250.41
Retention Ratios (%)88.3190.3692.1593.8987.69
Price / BV (X)1.711.371.451.460.55
Price / Net Operating Revenue (X)1.160.911.151.250.41
EarningsYield0.030.060.060.040.14

Profitability Ratios (%)

Liquidity Ratios

Liquidity Ratios (%)

Interest Coverage Ratios (%)

Valuation Ratios

Fair Value

Fair Value of Grasim Industries Ltd as of November 24, 2024 is: 3,645.29

Calculation basis:

  • Fair value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.

This formula allows us to gauge the fair value of the stock by analyzing its fundamental indicators.

As of November 24, 2024, Grasim Industries Ltd is Undervalued by 40.26% compared to the current share price 2,599.00

Intrinsic Value of Grasim Industries Ltd as of November 24, 2024 is: 3,805.52

Calculation basis:

  • Intrinsic value = P/E Ratio * (Return on Equity / 100) * Book Value * (1 + Dividend Yield / 100) * (1 + EPS CAGR for Last 5 Years)
  • P/E Ratio (Price-to-Earnings Ratio): Represents the price of the stock relative to its earnings per share. A higher P/E ratio indicates that investors are willing to pay a higher price for the stock.
  • Return on Equity (ROE): Measures a company's profitability relative to its shareholder equity. It showcases the company's ability to generate profits using the investment made by its shareholders, offering valuable insight into its operational efficiency and financial performance.
  • Book Value: Represents the net asset value of the company per share. It is calculated as the total assets minus intangible assets and liabilities, divided by the number of outstanding shares.
  • Dividend Yield: The ratio of the annual dividend per share to the current market price per share. It offers valuable insights into the profitability of an investment through dividends.
  • EPS CAGR (Compound Annual Growth Rate): Represents the geometric mean growth rate of earnings per share over the last 5 years. It provides insight into the historical growth trajectory of the company's earnings.

This formula allows us to gauge the intrinsic value of the stock by analyzing its fundamental indicators along with EPS growth.

As of November 24, 2024, Grasim Industries Ltd is Undervalued by 46.42% compared to the current share price 2,599.00

Last 5 Year EPS CAGR: 4.40%

*Investments are subject to market risks

Strength and Weakness

StrengthWeakness
  1. The stock has a low average Working Capital Days of 13.08, which is a positive sign.
  2. The company has shown consistent growth in sales (69.77 cr) and profit (7.62 cr) over the years.
  1. The stock has a low average ROCE of 10.08%, which may not be favorable.
  2. The stock has a high average Cash Conversion Cycle of 46.25, which may not be favorable.
  3. The company has higher borrowings (56,935.75) compared to reserves (50,203.67), which may suggest financial risk.

Stock Analysis

  • Considering all of the following key financial indicators, prospective investors are encouraged to conduct thorough research and seek professional guidance before considering any investment in Grasim Industries Ltd:
    1. Net Profit Margin: 7.51%
      • Net Profit Margin: This metric indicates the percentage of profit a company makes from its total revenue. A higher net profit margin is generally desirable as it reflects better profitability.
    2. ROCE: 7.32% (Industry Average ROCE: 11.13%)
      • ROCE (Return on Capital Employed): ROCE measures a company's profitability and the efficiency with which its capital is employed. A higher ROCE indicates efficient use of capital.
    3. ROE%: 6.34% (Industry Average ROE: 15.02%)
      • ROE (Return on Equity): ROE measures a company's profitability relative to shareholders' equity. A higher ROE indicates efficient use of shareholders' funds.
    4. Interest Coverage Ratio (Post Tax): 2.12
      • Interest Coverage Ratio: The interest coverage ratio measures a company's ability to cover its interest payments on outstanding debt. A ratio greater than 2 is generally considered healthy as it indicates the company can meet its interest obligations comfortably.
    5. Quick Ratio: 0.78
      • Quick Ratio: The quick ratio assesses a company's ability to cover its short-term liabilities with its most liquid assets. A ratio higher than 1 suggests the company can meet its short-term obligations without relying heavily on inventory.
    6. Stock P/E: 37.3 (Industry average Stock P/E: 21.09)
      • Stock P/E (Price-to-Earnings) Ratio: The P/E ratio compares a company's current share price to its earnings per share. A lower P/E ratio relative to industry peers or historical values may indicate that the stock is undervalued.
    7. Total Debt / Equity: 1.52
      • Total Debt / Equity: This ratio measures a company's financial leverage by comparing its total debt to its total equity. A lower ratio indicates lower financial risk and greater financial stability.
    The current analysis is available for review. It's important to conduct thorough research and consider consulting with financial professionals before making any investment decisions.
    Stock Rating:

About the Company - Qualitative Analysis

Grasim Industries Ltd. is a Public Limited Listed company incorporated on 25/08/1947 and has its registered office in the State of Madhya Pradesh, India. Company’s Corporate Identification Number(CIN) is L17124MP1947PLC000410 and registration number is 000410. Currently Company is involved in the business activities of Manufacture of synthetic or artificial filament staple fibre not textured. Company’s Total Operating Revenue is Rs. 20856.84 Cr. and Equity Capital is Rs. 131.66 Cr. for the Year ended 31/03/2022.
INDUSTRYADDRESSCONTACT
CementP.O. Birlagram, Dist. Ujjain, Nagda Madhya Pradesh 456331grasim.secretarial@adityabirla.com
http://www.grasim.com
Management
NamePosition Held
Mr. Kumar Mangalam BirlaChairman & Non-Exe.Director
Mr. Harikrishna AgarwalManaging Director
Mrs. Rajashree BirlaNon Executive Director
Ms. Ananyashree BirlaNon Executive Director
Mr. Aryaman Vikram BirlaNon Executive Director
Mr. Raj KumarNon Executive Director
Mr. Sushil AgarwalNon Executive Director
Mr. Cyril ShroffIndependent Director
Dr. Thomas M Connelly JrIndependent Director
Ms. Anita RamachandranIndependent Director
Mr. N Mohan RajIndependent Director
Mrs. V ChandrasekaranIndependent Director
Mr. Adesh Kumar GuptaIndependent Director
Mr. Yazdi Piroj DandiwalaIndependent Director

FAQ

What is the latest intrinsic value of Grasim Industries Ltd?

The latest intrinsic value of Grasim Industries Ltd as on 24 November 2024 is ₹3645.29, which is 40.26% higher than the current market price of ₹2,599.00.

What is the Market Cap of Grasim Industries Ltd?

The Market Cap of Grasim Industries Ltd is 1,74,768 Cr..

What is the current Stock Price of Grasim Industries Ltd as on 24 November 2024?

The current stock price of Grasim Industries Ltd as on 24 November 2024 is 2,599.

What is the High / Low of Grasim Industries Ltd stocks in FY 2024?

In FY 2024, the High / Low of Grasim Industries Ltd stocks is 2,878/1,938.

What is the Stock P/E of Grasim Industries Ltd?

The Stock P/E of Grasim Industries Ltd is 37.3.

What is the Book Value of Grasim Industries Ltd?

The Book Value of Grasim Industries Ltd is 1,411.

What is the Dividend Yield of Grasim Industries Ltd?

The Dividend Yield of Grasim Industries Ltd is 0.38 %.

What is the ROCE of Grasim Industries Ltd?

The ROCE of Grasim Industries Ltd is 9.30 %.

What is the ROE of Grasim Industries Ltd?

The ROE of Grasim Industries Ltd is 6.90 %.

What is the Face Value of Grasim Industries Ltd?

The Face Value of Grasim Industries Ltd is 2.00.

About the Author

Author Avatar
Getaka

Getaka, CFA, a financial analyst with 15 years of experience in the industry. Getaka holds an MBA degree and the Chartered Financial Analyst designation, demonstrating his profound understanding of financial analysis and investment management. Throughout his career, he has conducted numerous financial analyses and due diligence processes for companies in the industry, and has a strong track record of identifying key trends and opportunities. He leverages his expertise to deliver a thorough financial analysis of a company, encompassing its financial performance, key ratios, future prospects, and risks. Getaka is committed to providing accurate, reliable, and trustworthy information to help readers make informed decisions about their finances and investments.

Disclaimer: This article is for informational purposes only and should not be construed as financial advice. The author is not a SEBI registered financial advisor and does not have any vested interest in Grasim Industries Ltd. Investors are advised to conduct their own due diligence and consult with a financial professional before making any investment decisions. The information provided in this article is based on publicly available data and the author's analysis, but it may not be comprehensive or up-to-date. The author and getaka.co.in are not responsible for any errors or omissions in the content. This article is not intended to promote any particular investment strategy or recommendation, and readers should consult with their own financial advisors before making any investment decisions. Data Source: NSE