Grasim Industries Ltd. (GRASIM) AI Stock Analysis

• Market Cap: ₹1.82T
• Dividend Yield: N/A
• Average Volume (3M): 38.85K
• Price to Earnings (P/E): 46.3
• Beta (1Y): 1.15
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: IN
• Employees: 25,929
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Construction Materials
• EPS (TTM): -2.25
• Shares Outstanding: 680,580,570
• 10 Day Avg. Volume: 8,381
• 30 Day Avg. Volume: 38,846
• PEG Ratio: -1.35
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 1.18
• P/FCF Ratio: 52.53
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹3,420.00
• Price Target Upside: 20.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 9.84
• Revenue Forecast (FY): ₹399.01B

• Rating: 58 Neutral
• Price Target: ₹3,016.00 ▲(6.25% Upside)
• Action: N/A Date: 02/19/26
• Date: Action: N/A 02/19/26

The score is held back mainly by weaker financial quality (leverage and inconsistent cash conversion) and a high valuation. Offsetting these are constructive technical momentum and a positive earnings-call outlook highlighting strong growth execution in paints and scaling digital/building-materials initiatives, though segment margin and pricing risks remain.

Positive Factors

Diversified revenue scale

Sustained revenue expansion across multiple businesses has roughly doubled scale over five years, lowering single-segment concentration risk. Larger scale supports fixed-cost absorption, supplier/customer leverage and reinvestment capacity, improving resilience and optionality over the next several quarters.

Improving operating profitability

Significant EBITDA growth and strong standalone operating momentum reflect improved operational leverage and execution. Higher, sustainable operating profits provide internally generated resources to fund growth initiatives, deleverage and absorb cyclical shocks if maintained over the medium term.

Rapid paints franchise scale and market share

Rapid share gains, wide geographic coverage, SKU expansion and strong volume traction indicate structural market penetration in paints. A premium mix and expanding retail/distribution footprint support durable revenue growth and the potential for improving mix-driven margins long term.

Negative Factors

Rising leverage

Material increase in debt materially raises financial risk and interest exposure. Elevated leverage limits strategic flexibility, increases refinancing sensitivity and can amplify earnings volatility; this constrains the firm's ability to invest or return capital if cash generation falters over the next 2-6 months.

Weak and volatile cash conversion

Historically inconsistent cash conversion means reported profits have not reliably converted to free cash. Even with a 2025 recovery, low OCF relative to net income signals recurring working-capital or capex drains, reducing capacity to pay down debt or fund growth without external financing.

Chemical and industry margin pressure

Persistent margin headwinds in chemicals—driven by input cost swings and weak specialty pricing—plus industry-wide discounting in paints risk compressing consolidated margins. If pricing recovery lags or inputs remain elevated, profitability and cash flow will stay challenged medium term.

Grasim Industries Ltd. Business Overview & Revenue Model

Company Description

Grasim Industries Limited operates in fibre, yarn, pulp, chemicals, textile, fertilizers, and insulators businesses in India and internationally. The company operates through Viscose, Chemicals, Cement, Financial Services, and Others segments. It provides viscose staple fiber, a man-made biodegradable fiber for use in apparels, home textiles, dress materials, knitted wear products, and non-woven applications; wood pulp products; viscose filament yarn, a natural fibre for manufacturing fabrics; and textile products, such as linen and wool. The company also offers various chemical products, including chlor-alkali and epoxy resin products; and fertilizers comprising neem-coated urea, soil and crop specific customised fertilizers, seeds, agrochemicals, and plant and soil health products under the Birla Shaktiman brand name. In addition, it provides electrical insulators for transmission lines and substations, as well as equipment and railways. Further, the company offers grey cement; white cement under the Birla White brand; ready mix concrete; and cement-based putty. Additionally, it provides various financial services comprising non-bank financial, life insurance, asset management, housing finance, equity broking, wealth management, general insurance advisory, and health insurance services. The company is also involved in solar power designing, engineering procurement, and commissioning business. Grasim Industries Limited was incorporated in 1947 and is based in Mumbai, India.

How the Company Makes Money

Grasim Industries Ltd. Financial Statement Overview

Summary

Strong revenue growth and still-decent operating margins are offset by sharply compressed net margins, materially higher leverage (debt/equity ~1.91x), and historically weak/volatile cash generation despite a 2025 rebound in operating and free cash flow.

Income Statement

Revenue has grown steadily over the period (from ~₹751B in 2020 to ~₹1,485B in 2025), indicating solid scale-up. Profitability, however, has weakened meaningfully: net margin fell from ~5–8% (2020–2022) to ~2.5% in 2025, and net income dropped in 2025 despite higher revenue, pointing to cost pressure and/or higher depreciation/interest/taxes. Operating profitability remains decent (2025 operating margin ~14.7% and EBITDA margin ~18.6%), but both are below the stronger levels seen in earlier years (notably 2020–2022), suggesting margin compression.

Balance Sheet

The balance sheet shows rising leverage: total debt increased sharply (to ~₹1.86T in 2025 from ~₹0.85T in 2020), and debt relative to equity has moved up to ~1.91x in 2025 (from ~0.99x in 2022). While equity has grown (to ~₹975B in 2025) and the asset base expanded materially (to ~₹5.01T), the higher debt load increases financial risk and can weigh on bottom-line results, especially in periods of margin pressure.

Cash Flow

Cash generation has been volatile and a key weakness. Operating cash flow was negative in 2023 and 2024, and free cash flow was deeply negative in those years as well, signaling heavy cash outflows (likely working capital and/or investment intensity). In 2025, operating cash flow turned positive (~₹205B) and free cash flow recovered to positive (~₹33B), but cash conversion remains weak: operating cash flow is only about ~19% of net income in 2025, and free cash flow is also low relative to earnings, implying profits are not consistently translating into cash.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.55T	1.48T	1.31T	1.18T	957.01B	764.04B
Gross Profit	893.43B	859.41B	765.54B	663.79B	561.05B	477.57B
EBITDA	289.71B	276.43B	267.09B	211.57B	201.91B	184.20B
Net Income	39.16B	37.06B	56.24B	68.27B	75.50B	43.05B
Balance Sheet
Total Assets	0.00	5.01T	4.13T	3.37T	2.89T	2.68T
Cash, Cash Equivalents and Short-Term Investments	238.75B	250.45B	270.06B	224.44B	221.34B	276.20B
Total Debt	0.00	1.86T	1.39T	1.03T	747.44B	790.78B
Total Liabilities	-1.58T	3.43T	2.74T	2.14T	1.73T	1.65T
Stockholders Equity	1.58T	975.09B	886.52B	787.42B	756.98B	654.94B
Cash Flow
Free Cash Flow	0.00	33.29B	-302.04B	-247.21B	-15.50B	114.27B
Operating Cash Flow	0.00	205.10B	-107.19B	-126.85B	70.38B	150.75B
Investing Cash Flow	0.00	-239.82B	-231.13B	-136.87B	-35.43B	-92.17B
Financing Cash Flow	0.00	429.78B	339.08B	264.69B	-67.33B	-80.03B

Grasim Industries Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HINDALCO	75 Outperform	₹2.11T	24.02	―	0.58%	13.19%	42.27%
TATASTEEL	69 Neutral	₹2.45T	20.88	―	2.11%	-0.42%	132.70%
UPL	68 Neutral	₹518.02B	42.42	―	0.77%	8.14%	―
AMBUJACEM	64 Neutral	₹1.18T	168.78	―	0.37%	14.92%	63.27%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
GRASIM	58 Neutral	₹1.82T	46.29	―	―	―	―
SHREECEM	57 Neutral	₹942.39B	89.88	―	0.73%	1.58%	-0.75%