Grasim Industries Stock Falls Over 3% Amid Q2 Results, Paints CEO Exit; Nuvama Raises Target

Grasim Industries reported a consolidated net profit of Rs 553 crore for the second quarter of FY26, marking a significant 76% increase compared to the same period last year. Revenue also grew by 16.6% year-on-year to Rs 39,900 crore, with consolidated EBITDA rising 33.3% year-on-year to Rs 4,872 crore, boosted by stronger performance in the cement and chemical segments. However, the company's standalone EBITDA saw a 5% sequential dip, influenced by a weaker performance in the Chlor-Alkali (CSF) division and losses in newer segments such as B2B and paints.

Adding to the market's reaction, the CEO of Grasim's Paints segment has stepped down. The company has made substantial capital expenditure (capex) on its paint business, with Rs 9,727 crore already incurred, representing 97% of the planned outlay. The estimated capex for FY26 is Rs 2,300 crore.

Brokerage firm Nuvama Institutional Equities has reacted to the results by increasing Grasim's target price to Rs 3,198 from Rs 2,971, an 11% potential upside from the current market price. They maintained a 'Hold' rating, viewing Grasim as a 'value play' due to the Viscose Staple Fibre (VSF) cycle nearing its bottom and the long-term prospects of the paint segment, where their brand Birla Opus reportedly outperformed the industry in Q2FY26.

Impact: This news has a direct impact on Grasim Industries' stock price and investor sentiment. The mixed Q2 results, particularly the losses in new segments like paints and the dip in standalone EBITDA sequentially, have led to a share price fall. However, the brokerage firm Nuvama Institutional Equities sees long-term potential in the paint business and the global VSF cycle, leading them to raise the target price, which could offer some support. Shareholders will be watching future performance, especially in the paint division and debt levels. Rating: 7/10

Difficult Terms: VSF: Viscose Staple Fibre, a type of rayon fibre used in textiles. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization, a measure of a company's operating performance. YoY: Year-on-Year, comparing data from the current period to the same period in the previous year. QoQ: Quarter-on-Quarter, comparing data from the current quarter to the previous quarter. Consolidated: Financial results that combine the financial performance of a parent company and its subsidiaries. Standalone: Financial results of a company considered on its own, without its subsidiaries. Capex: Capital Expenditure, money spent by a company to acquire, upgrade, and maintain physical assets like property, plants, and equipment.