Investment Shastra

Company Shastra – Grasim Industries Ltd.

Grasim Industries Ltd. headed by Kumar Mangalam Birla is the flagship company of Aditya Birla Group. Grasim Industries Ltd. is involved in 3 segments- i.e. Cement(through its major subsidiary UltraTech), Viscose Staple Fibre (VSF), and Chemicals. After the merger of Samrudhi Cements Ltd ( SCL) & UltraTech, UltraTech has become the biggest cement producer with a capacity of 49 Mn TPA which is more than 1.7 times to its closest competitor. It has a pan India presence and its brand UltraTech is one of the most well established brands in the cement sector. It is also the pioneer of VSF in India and is the world’s largest producer with a total global share of 24%.

The company’s financial performance over the last 10 years has been very good. The last few quarters have been challenging for its cement segment (around 80% contribution to revenue) due to oversupply condition, rising cost of raw materials etc. This has affected both the sales and profits on a consolidated basis. This trend is expected to continue in the short-term too.

At the back of these short-term concerns, is Grasim headed for a high growth in the long-term?
Read on for Answers

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