Grasim Industries' stock is gaining attention on November 14 as the company is poised to deliver robust financial results for the quarter ending September 30, 2024. The Aditya Birla Group's flagship company is set to announce its Q2FY25 earnings later today, with analysts predicting significant growth in both revenue and profit.
Investors are monitoring the results closely, as double-digit growth is anticipated in these key areas. For those looking to invest in stocks, this could be an important update to track.
Anticipated growth in revenue and profit
According to estimates from several analysts, Grasim's revenue from operations is expected to rise by 17-20% year-on-year (YoY). The company's net profit is projected to grow by around 18% YoY, reflecting its strong performance in key business segments. Among the individual divisions, the Viscose Staple Fibre (VSF) segment is expected to see a modest 2% YoY revenue increase. In comparison, the chemicals segment is likely to experience a more robust 5% YoY growth.
The VSF segment has benefited from improved product realisations, although new ventures, particularly in paints and B2B, have impacted overall margins. Despite this, analysts remain optimistic about the company's prospects in the coming months.
Potential challenges in the paints segment
The paints division remains a concern, as analysts predict continued losses due to ongoing ramp-up efforts. Grasim is in the early stages of expanding its paint business. Although the long-term outlook remains positive, the division's current financials are not expected to contribute significantly to the company’s overall profitability in the short term.
Additionally, Grasim’s standalone EBITDA is expected to decline 34% YoY, totalling ₹390 crore. Analysts attribute this to increased interest and depreciation costs, both of which are expected to rise by 39% and 23% YoY, respectively. Despite this, adjusted profit is projected to increase by 16% YoY, reaching ₹920 crore.
Stock performance and outlook
Grasim’s stock has shown a positive trend this year, gaining 19% thus far, outperforming the Nifty's 8% gain. Over the past 12 months, the stock has risen by 30%, while the Nifty saw a 19% rise during the same period. Grasim's strong performance in key segments like chemicals and VSF, along with the expected growth in profit and revenue, is likely to continue supporting the stock’s upward trajectory.
Investors keen to invest in stocks in the coming days will likely monitor the earnings results closely, as these could provide key insights into the company's long-term growth prospects.
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