Grasim Inds (GRASIM)

FairStock Score: 38/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I am wearing both Buffett's business-quality lens and Graham's valuation shield. Grasim is a large ₹2.20 lakh Cr cement and cement-products company in a cyclical industry. The latest quarter shows scale: sales of ₹44,312 Cr and net profit of ₹2,233 Cr, while sales growth is 25.92% and profit growth is 308.71%. The five-year revenue CAGR of 16.82% is respectable. Promoter holding at 43.73% gives some alignment, and Piotroski F-Score of 7/9 suggests recent accounting/operating signals are not weak. But the economics are not compelling enough. ROE is 9.51% and ROCE is 7.50%, below what I want from a quality compounder. Debt/equity is 1.35, current ratio is 1.17, and free cash flow is negative ₹40,483 Cr—a red flag when capital is being consumed. Altman Z-Score of 1.07 raises financial-distress questions. The valuation is the bigger problem: at ₹3,248.70, P/E is 38.76, P/B is 2.13, dividend yield is only 0.31%, and Graham Number is ₹1,476.51. That gives a margin of safety of -89.62%, meaning the market price is far above my conservative intrinsic estimate. EV/EBITDA of 607.71 is simply not attractive on the given figure. So I see a cyclical, capital-intensive business with scale and growth but poor cash generation, moderate returns on capital, elevated leverage and a demanding price. The 52-week range of ₹2,502.50–₹3,411.10 shows the market has already rewarded it. I would wait for debt reduction, positive free cash flow, ROCE improvement and a price closer to Graham's number before calling it a bargain. For now: watch, do not chase.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer