Grasim Industries Operational performance disappoints - Downgrade to HOLD ::Emkay

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��

Grasim Industries

Operational performance disappoints - Downgrade to HOLD

HOLD

CMP: Rs2,483                                        Target Price: Rs2,550

---

n     Q3FY12 standalone EBIDTA at Rs2.8 bn (-23% yoy) below est led by lower VSF volumes and margins. However APAT at Rs2.7bn (-3% yoy) came in line led by higher other income 

n     Though VSF realisation improved 4.4% yoy (3% qoq) led by INR deprecation, VSF  volumes decline 7.6% impacted by sluggish demand across markets particularly  in EU  

n     Due to 3Q operation performance miss we we cut FY12/13 EBITDA estimates by -3.9%/-5.1%. However the cut in EPS estimates is lower on account of higher other income

n     Demand outlook for VSF remains uncertain - expect volatile VSF prices affected by factors like channel inventory, currency fluctuations. Cost to remain high led by CIL’s new coal pricing system. Downgrade to HOLD – lower TP Rs2550