Grasim Industries Q1 Preview: Net loss can become larger to RS 309 Crore in the midst of paint, VSF pressure. 5 things to pay attention

The Grasim Industries is expected to report a larger net loss in Q1 despite the robust revenue growth of more than 30% on an annual basis. Brokers expect weak profitability due to continuous losses in New-Age Verticals such as paint and B2B-E-Commerce, as well as soft margins in the core-viscose fiber activities. While the chemical segment shows marginal improvement, analysts remain cautious about marquar and cost wind.

The estimates of Kotak Institutional Shares, ICICI effects and ancient share framing have been taken into consideration.

This is what they have recommended:

To chatter

-Kotak Equites expects that the stand -standing net loss will increase to RS 309 Crore versus RS 52 Crore loss in the period of the year ago, with reference to weak VSF performance and continuous losses in the Paints Division.

– Antique stock broken the net loss at RS 178 Crore.

-Ici-effects predicts a net loss of RS 254 Crore, powered by margin pressure and expansion-related costs. Brokers said that the Bottom-Line pressure will probably last, mainly due to persistent losses in new companies and modest operational leverage in core Verticals. Kotak emphasizes a resistance of the VSF segment, while icici refers to B2B and paint-related costs such as margin eroders.

Gain

– Kotak – Shares: RS 9,195 Crore ( +33% JoJ, +3% QoQ)

– Antique Stock Broking: RS 9.111 CRORE ( +32.2% JOJ, +2.1% QOQ)

– ICICI -Effects: RS 8,965 Crore ( +30% JoJ, +0.4% QoQ)

Turnover growth is expected to remain robust across the board, supported by solid traction in the chemical segment and a healthy top growth in the building materials division. Kotak emphasizes a 0.5% QoQ increase of the chemical volumes, while ICICIers see the paint and B2B e-commerce segment that contributes to 2,200 crore, although consecutive Flattish.

EBITDA

The income before interest, taxes, depreciation and amortization (EBITDA) growth remain on a YOY basis due to a lower profitability in VSF and persistent start -up costs in new companies. However, successive improvements are visible between estimates. Kotak attributes the QoQ profit to cost optimization and light demand for chemicals.

-Kotak shares: RS 245 Crore (-24.7% JoJ, +11% QoQ)

-Santieke stocking: RS 270 Crore (-17% JoJ, +22.4% QoQ)

-Ici-effects: RS 255 Crore (-21.6% JoJ, +15.5% QoQ)

“We Estimate Standalone EBITDA or RS 2.4 BN Including (1) VSF EBITDA or RS 2.6 BN (-35% YOY, -10.4% QOQ) On Lower Prices, (2) Chemicals EBITDA or RS 3.1 BN ( +4.3% in Gradular and 0.6% and 0.6% and +0.6% and 0.6% and and 0.6% and 0.6% in Gradular, +0.6% in Gradular, +0.6% in Gradular and 0.6% and in Gradular and 0.6% in Gradual and and 0.6% in Gradual and and 0.6% in Gradual and and 0.6% in Gradual and and 0.6% in Gradual and oyy and oyy, +. Marginally Lower Costs, And (3) Sustained Level of Losses in Paints Division with a robust turnover growth, “said Kotak in a preview nut.

EBITDA -Marge

– Kotak – Shares: 2.7%, Down 206 BPS Yoy, UP 19 BPS QoQ

– ICICI Securities: 2.8%, a decrease of 187 BPS Yoy, higher 37 BPS QoQ

“For Grasim Industries, EBITDA margins will probably make 40bps QoQ inches (although it can still be a fall of 190 pbps based on YOY as a result of estimated losses for new companies such as Paints and B2B e-commerce segment). We estimate the income for the building material, combining and bsde, and bs-binte, rse anbn, and b2b, b2b, b2b, b2b e-commerce, and bs-binte and rs-binte, and b2b e-commerce, and bsalde, and bs-binte, and bs-binte, and b2b, and b2b. RS 22BN ANDE RS 22BN Segment).

Main monitorables

One of the most important monitorables is performance and margin outlook for paints and B2B e-commerce, VSF-Perrend and Volume recovery, asking momentum in chemicals and EBITDA contribution of new verticals

(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)