Grasim Industries Limited

Basic Materials — Building Materials · NSE

₹2,920.00+₹34.10 (+1.18%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by moderate debt load, short-term liabilities exceed short-term assets, negative free cash flow.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:59 pm

Understanding the Business

Company site ↗

The 60-second version of Grasim Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Grasim Industries Limited, together with its subsidiaries, primarily produces cellulosic fibres, diversified chemicals, fashion yarns, and fabrics in india and internationally.

IndustryBuilding Materials

SectorBasic Materials

Employees28,259

Annual revenue₹1.74 L Cr

How does it make money?

Turns over ₹1.74 L Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹15 left at the operating level before interest, tax and depreciation. Each of its 28,259 employees supports ₹6.15 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹6.15 Cr

Who are its competitors?

The closest listed comparisons in its industry are ULTRATECH CEMENT LIMITED, AMBUJA CEMENTS LTD, SHREE CEMENT LIMITED, DALMIA BHARAT LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE7.4%

What is the outlook?

5 analysts covering the stock expect revenue to grow about 10.7% and earnings to grow about 20.5% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+10.7%

Est. earnings growth+20.5%

Analysts5

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +49% while net margin moved -51% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+49%

Margin effect-51%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 4.8% is weak
✗ ROE has fallen by 3.9 points over the period

Quality vs. Valuation

Company Quality

40/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

55/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

34.8x

3Y Median

32.1x

40 monthly readings · mean 35.3x · range 17.2x–56.3x

Sector Median

35.5x

median of 4 sector peers

🟡Currently trading close to its 3y median of 32.1x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 35.5x.

vs. its own history

Fair

32.1x median over 40 months · +8%

vs. sector peers

Fair

35.5x median of 4 peers · -2%

vs. generic bands

Fair

15x–35x

EV/EBITDA

16.6x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 8.7% to 4.8% — each rupee of shareholder capital earns less than it did.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Debt has risen sharplyFinancial
Total debt is up 121% over 3 years, from ₹1.03 L Cr to ₹2.28 L Cr.
🔴Free cash flow negative for 4 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Profit is decliningFinancial
Net profit is down 27% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 2.8 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 85% against revenue up 49% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.95 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 17.4% to 14.6%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 8.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 85% against revenue up 49%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 8.7% to 4.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.3% CAGR
Latest reported year was 21.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 13%✓ 14.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 8.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹33,436 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ 4.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

5 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

4 good · 4 neutral · 3 weak

Market Cap

₹1.98 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

34.8x

Fair

Fairly valued against the generic band

P/B Ratio

1.91x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹83.85

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

4.0%

Weak

Low return on total capital employed

Debt/Equity

1.35x

Moderate

Moderate leverage

Revenue Growth (YoY)

21.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

51.3%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.34%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹33,436 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

19.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

18.8%

Good

Healthy core-business profitability

Net Margin

3.1%

Average

Average bottom-line conversion

Current Ratio

0.95

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.41

Defensive

Steadier than the market

52W Range Position

46%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

3019.1 / 3178.3

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

25.8

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1.16 L Cr	₹1.30 L Cr	₹1.47 L Cr	₹1.74 L Cr	+14.3%
EBITDA	₹20,278 Cr	₹20,275 Cr	₹19,566 Cr	₹25,474 Cr	+7.9%
EBITDA Margin	17.4%	15.6%	13.3%	14.6%	—
PAT (Net Profit)	₹6,827 Cr	₹5,624 Cr	₹3,706 Cr	₹4,966 Cr	-10.1%
EPS	₹103.47	₹85.15	₹55.5	₹73.13	-10.9%
ROE	8.7%	6.3%	3.8%	4.8%	—
ROCE	6.0%	4.8%	3.5%	4.0%	—
Total Debt	₹1.03 L Cr	₹1.37 L Cr	₹1.86 L Cr	₹2.28 L Cr	+30.3%
Free Cash Flow	-₹24,721 Cr	-₹30,204 Cr	-₹34,351 Cr	-₹33,436 Cr	—

🟢 Revenue has grown at 14.3% a year over 3 years.

🟢 EBITDA has grown at 7.9% a year over 3 years.

🔴 EBITDA Margin has fallen from 17.4% to 14.6% over 3 years (-2.8 pts).

🔴 PAT (Net Profit) has shrunk at 10.1% a year over 3 years.

🔴 EPS has shrunk at 10.9% a year over 3 years.

🔴 ROE has fallen from 8.7% to 4.8% over 3 years (-3.9 pts).

🔴 ROCE has fallen from 6.0% to 4.0% over 3 years (-2.0 pts).

🔴 Total Debt has grown at 30.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹5.70 L Cr

Total Liabilities

₹4.00 L Cr

Cash & Equivalents

₹2,784 Cr

Operating Cash Flow

-₹17,810 Cr

Capex

-₹15,626 Cr

Shareholding (proxy)

Institutional Holding

22.5%

Insider Holding

48.8%

Corporate Actions

Next Earnings

05 Nov 2026

Dividend Rate

₹10

Ex-Dividend Date

07 Aug 2026

Analyst Consensus

Recommendations

10 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹3,837.5

+31.4% vs CMP

Target Range

₹3,500 – ₹4,175

Peer Comparison

Company	P/E	ROE
ULTRATECH CEMENT LIMITED	37.6x	11.1%
AMBUJA CEMENTS LTD	20.4x	7.4%
SHREE CEMENT LIMITED	49.7x	7.0%
DALMIA BHARAT LIMITED	33.4x	5.2%

Recent News

2 positive3 mixed1 general

GRASIM Outlook for the Week

Equitypandit, 09 Oct

Grasim Industries fixes record date for ₹10 dividend

scanx.trade, 15 OctCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Top 3 stocks to buy: Bajaj Finance, Dr Reddy's Lab, Grasim Industries by Sumeet Bagadia | Target price, stop-loss

Livemint, 16 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Grasim Industries share price falls 3% as Q2 margin outlook weighs

Business Standard, 13 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Grasim Industries shares rally 6% to hit 52-week high; check what analysts said post-Q4 earnings

Upstox, 21 MayPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Grasim Industries Ltd (BOM:500300) (Q1 2027) Earnings Call Highlights: Record Revenue and ...

Yahoo Finance, 12 AugResults

🟢Potentially positiveA record operating figure, if it holds, feeds directly into the growth and profitability inputs on this page.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongRisk

MiddlingBusiness Quality · Valuation

WeakFinancial Health · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; ROCE stays above 8% · see Key things to watch ↑