Grasim: Investors bet on paints, ignore weakness in core business

Investors and analysts are betting on a fast ramp-up in paints division and its e-commerce venture of selling construction goods

The AV Birla group flagship Grasim Industries has been an outperformer on the bourses. The company’s stock price is up 56.5 per cent in the last two years, compared to 30.8 per cent rally in the benchmark Nifty 50 during the period. The stock has also outperformed in the recent rally and is up 10.7 per cent since the start of 2025 calendar year, compared to 6.2 per cent rise in the benchmark index in the period. 

The numbers, however, suggest that the rally has been driven by a valuation rerating of Grasim rather than underlying rise in its earnings.