This Nifty firm may post biggest jump in YoY Q4 profit; should you buy, hold or sell stock?

Grasim Industries Ltd, whose shares have seen 4 per cent earnings downgrade, since December quarter results, could post the biggest growth in profits among the Nifty constituents. If one goes by what Motilal Oswal says, the diversified player may log 80 per cent YoY growth in profit in the March quarter, the highest in the Nifty pack.

This is even as it expects Grasim's revenue is estimated to decline 3 per cent YoY. In its latest note, Motilal Oswal Securities  said viscose staple fibre (VSF) volume is estimated to increase 5 per cent YoY, while realisation is estimated to decline 6 per cent YoY. 

"Chemical segment volume is estimated to increase 6 per cent YoY, while realisation could decline by 20 per cent YoY. We expect the company’s Ebitda to increase 20 per cent YoY and Ebitda margin to improve 1.6 percentage points YoY to 8 per cent. Adjusted PAT is estimated to grow 80 per cent YoY," it said.

Grasim is a producer of viscose, diversified chemicals, linen yarn and fabrics producer in India. Through its subsidiaries, it is a key cement player. The Aditya Birla Group company recently entered paints segment with a brand name 'Birla Opus'.

Motilal Oswal sees Grasim's Q4 profit at Rs 168.30 crore, up 80 per cent. Sales are seen at Rs 6,430 crore. For now, it has a 'Buy' rating on the stock with a target of Rs 2,650.

The Grasim stock has an average target price of Rs 2,452, as per publicly available data with Trendlyne. This average target price suggests an 8 per cent potential upside.  

Kotak Institutional Equities sees Q4 profit for Grasim Industries at Rs 152.80 crore, up 63.4 per cent YoY. Sales for the quarter is seen dropping 7.2 per cent YoY to Rs 6,168.50 crore. Ebitda margin is seen coming in at 7.7 per cent against

"We model a marginal 1.2 per cent YoY volume decrease in VSF operations on a subdued demand environment and 8.3 per cent YoY volume increase in the chemical operations on gradual demand improvement," it said. This brokerage has reduced rating on the stock with a target of Rs 2,135,

On a standalone basis, realisations in VSF and chemicals remain under pressure, said Nuvama. "Furthermore, losses from new business segments of B2B ecommerce and paints shall hamper overall margins of the company," it said. This brokerage expects Grasim's standalone adjusted profit to come in flattish at Rs 93.10 crore. It sees standalone sales falling 9.3 per cent YoY o Rs 6,027.60 crore. This brokerage has a 'Hold' rating on Grasim Industries.