Grasim shares slide 5% after Q2 results; what's weighing the stock down?

Rakshit Hargave, who resigned as the CEO of Birla Opus Paints, is set to take over as ED and CEO of Britannia Industries

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Shares of Grasim Industries fell over 5 per cent on Thursday after the company reported a positive second-quarter result driven by its cement and chemicals businesses. However, analysts remained cautious as the resignation of the chief executive officer (CEO) may weigh on the stock. 

 

The Aditya Birla group firm's stock fell as much as 5.27 per cent during the day to ₹2,730 per share, the steepest intraday fall since April 7 2024. The Grasim stock pared losses to trade 5 per cent lower at ₹2,736 apiece, compared to a 0.25 per cent decline in Nifty 50 as of 10:35 AM. 

 

Shares of the company fell for the second straight session and currently trade at 9.9 times the average 30-day trading volume, according to Bloomberg. The counter has risen 10.7 per cent this year, compared to an 8 per cent advance in the benchmark Nifty 50. Grasim has a total market capitalisation of ₹1.8 trillion. 

Grasim Q2 results 

Grasim Industries reported a 76 per cent rise in consolidated profit in the September quarter to ₹553 crore from the year before. Consolidated revenue increased 17 per cent to ₹39,900 crore, supported by strong performance in building materials and chemicals. 

 

Consolidated ebitda grew 29 per cent to ₹5,217 crore, the company said, referring to earnings before interest, taxes, depreciation, and amortisation. Standalone revenue touched a record Rs 9,610 crore, up 26 per cent and led by the ramp-up in paints and the business-to-business ecommerce (B2B) verticals, along with resilience in the cellulosic fibres and chemicals divisions.

 

The building materials segment, which includes cement company UltraTech, Birla Opus paints and Birla Pivot ecommerce platform, earned Rs 22,253 crore in revenue, up 28 per cent year-on-year.  

Rakshit Hargave, resigned as the CEO of Birla Opus Paints, the company said in a statement. Further, Hargave is set to take over as Executive Director (ED) and CEO of Britannia Industries Ltd, the biscuit maker said.   ALSO READ | Brokerages bullish on IndiGo despite wider loss in Q2; share price rises 3% 

Analysts on Grasim earnings

Motilal Oswal said Grasim Industries’ second-quarter profitability exceeded expectations, driven by a stronger-than-anticipated performance in the chemical segment. The brokerage noted that the resignation of the paints business CEO could weigh on the stock in the near term.

 

While maintaining a positive view on the company, Motilal Oswal raised the holding company discount to 40 per cent from 35 per cent, citing short-term headwinds in the paints segment. It added that it will closely track revenue momentum and losses in the business. The brokerage reiterated its ‘buy’ rating on Grasim Industries with a target price of ₹3,410.

 

Nuvama Institutional Equities said it has trimmed its FY26 Ebitda estimate for Grasim by around 3 per cent following the second-quarter miss. The brokerage believes Grasim remains a value play, supported by the global viscose staple fibre (VSF) cycle nearing its bottom and the potential long-term value of the paints business. Nuvama retained its 'hold' rating with a revised target price of ₹3,198, from ₹2,971 earlier.