Grasim Industries target ₹3,133 on Q2FY26 results

Geojit revises target, keeps BUY

Geojit Investments has reiterated a BUY call on Grasim Industries, the Aditya Birla Group flagship, and raised its target price to ₹3,133. The brokerage’s target implies a 14% upside from the stock’s market price of ₹2,746 as of December 9, 2025. Geojit’s view is anchored in Grasim’s diversified exposure across cement, paints, chemicals and newer ventures that are scaling up. The note also points to Q2FY26 earnings momentum, where profit growth outpaced revenue growth, supported by better operating leverage.

Q2FY26: revenue up 16.6%, margins improved

Grasim reported consolidated revenue of ₹39,900 crore in Q2FY26, up 16.6% year-on-year. Consolidated EBITDA rose 28.6% to ₹5,217 crore, while EBITDA margin expanded 120 basis points to 13.1%. Adjusted profit after tax (PAT) increased 39% year-on-year to ₹553 crore. For H1FY26, revenue growth was reported at 16.3% to ₹80,018 crore, indicating continued scale-up across key operating segments.

Segment snapshot: chemicals, cellulosic fibres and building materials

The company disclosed that its cellulosic fibres segment posted revenue of ₹4,149 crore, up 1% year-on-year, while EBITDA declined 29% to ₹350 crore due to higher input prices that were absorbed by the company. In chemicals, overall revenue rose 17% year-on-year to ₹2,399 crore, and EBITDA increased 34% to ₹365 crore, led by higher volumes in chlorine derivatives and improved ECU realisations.

Building materials remained a key driver. Despite monsoon-related demand weakness, the building materials segment reported revenue of ₹22,253 crore, up 28% year-on-year, with EBITDA of ₹2,950 crore, up 55% year-on-year. Management said the segment’s profitability was supported by robust performance in cement, partly moderated by initial investments for scaling the paints and B2B commerce businesses.

UltraTech Cement: expansion plan and operating metrics

UltraTech Cement, Grasim’s key listed holding, announced an expansion plan that targets total grey cement capacity (India plus overseas) of 240.8 mtpa by March 2028 versus current capacity of 192.3 mtpa. In Q2FY26, consolidated cement sales volumes were 33.85 MT, up 6.9% year-on-year, while ready-mix concrete sales volumes rose 26% to 3.79 million cubic metres. Operating EBITDA per tonne increased 32% year-on-year to ₹966 compared with ₹732 in Q2FY25. UltraTech Building Solutions outlets increased to 5,084, contributing 20.5% of total domestic grey cement sales volume. Green power mix for the cement business stood at 41.6% versus 30.2% in Q2FY25, with a stated target of 85% by FY30.

Birla Opus: sixth plant starts, capacity scales

Grasim’s decorative paints venture Birla Opus commissioned its sixth plant at Kharagpur in October 2025. The Kharagpur facility has an annual capacity of 236 million litres and lifts total installed paints capacity to 1,332 million litres per annum (MLPA). The company also stated that Birla Opus had around a 24% share of industry capacity, positioning it as the second-largest decorative paints industry capacity share on that measure.

Birla Pivot and other new ventures

Birla Pivot, Grasim’s B2B platform, reported revenue growth of 15% quarter-on-quarter, driven by new buyers, repeat orders and a wider product mix. The platform has expanded into categories including polymers, solvents, textile chemicals and non-ferrous metals, and targets revenue of ₹8,500 crore by FY27.

In other disclosures, Aditya Birla Renewables doubled Q2 revenue to ₹259 crore. The textiles business turned profitable on an operating basis, reporting EBITDA of ₹24 crore. Grasim also indicated that a lyocell expansion is targeted for commissioning by mid-2027.

Valuation and forecasts highlighted by Geojit

Geojit said it marginally cut FY26E revenue estimate to ₹1,71,288 crore (down 2.3% versus earlier estimates) while still baking in 15.4% growth. For FY26E, the brokerage projected EBITDA of ₹26,603 crore with an EBITDA margin of 15.5%. For FY27E, Geojit projected sales of ₹1,89,857 crore, EBITDA margin of 16.2%, and PAT of ₹7,818 crore, translating to an EPS estimate of ₹114.9.

Morgan Stanley upgrade: ‘Overweight’ and ₹3,500 target

Separately, Morgan Stanley upgraded Grasim to ‘Overweight’ and raised its price target to ₹3,500. The brokerage cited stronger-than-expected performance in Birla Opus, stating that the paints business has delivered market share gains since launch. Morgan Stanley also described UltraTech as Grasim’s largest value driver and pointed to scaling of newer businesses as a contributor to earnings growth and value optionality. In a market reaction cited alongside the upgrade, Grasim shares rose as much as 5% in trade on June 10.

Key numbers at a glance

Market impact: what investors are tracking

The immediate market focus has been on two linked themes: margin expansion in core operations and the pace of scale-up in new businesses such as paints and B2B commerce. Q2FY26 margin improvement to 13.1% at the consolidated level, alongside a 39% rise in adjusted PAT, strengthens the narrative that operating leverage is building across the portfolio. In building materials, strong EBITDA growth was reported even as Birla Opus and Birla Pivot continue to require investments.

Broker views diverge on valuation levels but converge on the importance of execution. Geojit’s ₹3,133 target is tied to earnings projections through FY27E, while Morgan Stanley’s ₹3,500 target is framed around multiple growth drivers, including value unlocking in paints and UltraTech’s multi-year expansion plan.

Analysis: why the ₹3,133 target matters

A key reason Grasim remains in focus is the combination of a large cement exposure through UltraTech and the attempt to build a consumer-facing paints business at scale. The company’s disclosures provide measurable milestones: capacity build-out in paints to 1,332 MLPA, and a clear cement capacity path to 240.8 mtpa by March 2028. At the same time, Q2FY26 data show that chemicals recovered with 17% revenue growth and 34% EBITDA growth, adding another earnings lever.

For investors, the data points to monitor are straightforward: whether Birla Opus sustains distribution-led traction while investments remain elevated, whether chemicals maintain volume and ECU realisation support, and how quickly building materials EBITDA continues to expand alongside capacity additions. Geojit’s forecasts for FY26E and FY27E suggest a margin-led earnings ramp, which underpins its target.

Conclusion

Geojit’s revised ₹3,133 target and BUY rating build on Q2FY26 performance, where Grasim reported faster growth in EBITDA and adjusted PAT than revenue, alongside margin expansion to 13.1%. Updates on Birla Opus commissioning, Birla Pivot’s category expansion, and UltraTech’s capacity plans offer concrete operational milestones for the next few years. Investors will next track subsequent quarterly updates for progress on paints scale-up, cement expansion execution, and the durability of the chemicals recovery.