The brokerage also named Aditya Birla Group Company “the top pick of coverage,” citing “multiple opportunities to play” and better-than-expected performance in the newly launched paint business.
The target price of Rs 3,500 means a potential rise of 28.5% from the stock price rise on Tuesday.
“The paint business has been better than expected since its launch,” Morgan Stanley said, adding that he expects “the next paint leg will be unlocked on play.”
Ultratech and the new era bets are focused
While the paint segment has had a promising start, the brokerage emphasized that “Ultratech remains the biggest value driver for Grasim,” adding that “it should benefit from the harmonious story of UTCEM’s multi-year revenue.”
Morgan Stanley also noted that Grassim’s diversification strategy is paying off. “The new era of businesses are expanding quickly, driving revenue and promoting valuable options,” the broker said, adding that “Holdco discounts could be further eased as Paints Business Scales rise.”
Technical signal strength
Grasim shares have grown 12.4% over the past year and 11% over the past three months. In the past week alone, inventory has skyrocketed by 6%, supported by bullish signals from key technical indicators.
Stocks are currently trading above five of eight important simple moving averages (SMAs), including five days, 10 days, 100 days, 150 days and 200 days. The relative strength index (RSI) stands at 47.3, suggesting that inventory will not be over-acquired or over-sold.
However, the moving average convergence divergence (MACD) is -32.2, below both its signal and the centerline. This is a technically bearish signal that shows some degree of attention among traders.
Strong Q4 revenue
The upgrade follows strong revenues in March. In May, Grasim reported consolidated net profit of 1,496 crores for Q4FY25, up 9% from 1,370 crores in the same period last year. Revenue from the business increased 17% year-on-year to Rs 44,267 from Rs 37,727.
The company also recommended a dividend of Rs 10 per share for the fiscal year ended March 31, 2025.
Read Also | Grasim Industries Q4 Results: Cons Pat is up 9% year-on-year to Rs 1,496 trillion. Rs 10 per share has been announced
(Disclaimer: The recommendations, suggestions, opinions and opinions given by experts are their own. (These do not represent views of the economic era)
