Motilal Oswal has issued a BUY recommendation for Grasim Industries , setting an ambitious target price of ₹3,600 per share. The domestic brokerage firm has expressed confidence in the Aditya Birla Group's flagship company, citing multiple growth engines that are expected to drive business performance.

Brokerage Recommendation Details

The research report from Motilal Oswal highlights a positive investment outlook for Grasim Industries, with the brokerage maintaining its optimistic stance on the diversified conglomerate. The ₹3,600 target price represents the firm's assessment of the stock's potential based on current market conditions and business fundamentals.

Growth Engine Analysis

Motilal Oswal's recommendation is anchored on the identification of multiple growth engines within Grasim Industries' business portfolio. The brokerage firm's analysis suggests that these growth drivers are currently in play and positioned to contribute to the company's future performance trajectory.

Market Position

As the flagship company of the Aditya Birla Group, Grasim Industries holds a significant position in the Indian corporate landscape. The company's inclusion in the BSE 100 index reflects its market capitalization and trading liquidity, making it an attractive proposition for institutional and retail investors alike.

The positive brokerage coverage from Motilal Oswal adds to the investment community's assessment of Grasim Industries' strategic positioning and operational capabilities across its diversified business segments.

Motilal Oswal has maintained its BUY rating on Grasim Industries with a target price of ₹3,600, citing a compelling structural long-term investment case across the company's diversified business portfolio. The brokerage's recommendation is based on a Sum-of-the-Parts (SoTP) valuation approach.

VSF Business Recovery Outlook

The Viscose Staple Fibre (VSF) business is entering a margin recovery phase in 2HFY26, supported by several favorable factors. The segment benefits from consistently high utilization levels exceeding 90%, which positions it well for the anticipated recovery cycle.

The recovery is expected to be driven by a modest rebound in China pricing, stable pulp costs, and the high utilization rates, which should collectively drive an expansion in EBITDA per kg and overall margins over FY27-28E.

Chemicals Business Stability

Grasim Industries maintains a strong position in the chemicals segment through its leadership in chlor-alkali and epoxy resins. The company is making strategic investments to enhance its operational efficiency and market position.

Despite a correction in caustic soda prices due to overcapacity in the market, the company's focus on specialty chemicals and ongoing investments to raise chlorine integration to approximately 70% underpin steady revenue and EBITDA growth prospects.

Paints Business Growth Potential

The decorative paints business, operating under the Birla Opus brand, represents a significant long-term growth opportunity. While currently in an investment-led phase, the business is positioned to capitalize on the large and under-penetrated Indian paints market.

The paints division is experiencing rapid distribution expansion and significant brand investments, positioning the business for medium-term operating leverage once adequate scale is achieved. This scalable growth optionality adds to the overall investment appeal of Grasim Industries.

Investment Recommendation

Motilal Oswal's BUY rating with a target price of ₹3,600 reflects confidence in Grasim Industries' diversified business model and multiple growth drivers across different segments. The SoTP valuation approach accounts for the distinct value propositions of each business vertical, from the cyclical recovery in VSF to the steady performance in chemicals and the growth potential in paints.