Grasim Industries Ltd.
ISIN: INE047A01021 • Market Cap: ₹2.24 Lakh Cr
The 5-Pillar Quality Audit for Grasim Industries Ltd.
Evaluated across Profitability, Financial Health, Historical Compounding, Valuation Safety, and Ownership Governance:
1. Profitability & Capital Efficiency
Weight: 25%Measures operating margins (21.0%), Return on Capital Employed (6.6%), and equity compounding (4.8%).
2. Financial Health & Solvency
Weight: 25%Debt-to-Equity is 2.19 with comfortable interest coverage and clean working capital.
3. Growth & Compounding Track Record
Weight: 20%Historical 3Y Sales CAGR (12.0%) and 3Y PAT CAGR (25.9%).
4. Valuation Multiple & Margin of Safety
Weight: 15%Trades at P/E of 39.36 vs PEG of 2.16 and Dividend Yield of 0.3%.
5. Ownership Quality & Governance
Weight: 15%Promoter holding stands at 43.7%, backed by 30.8% institutional ownership.
Key Fundamental Strengths
High-Velocity Profit Compounding (3Y PAT CAGR: 25.9%)
Net earnings have compounded at 25.9% annualized, demonstrating operating leverage.
Deep Institutional Sponsorship (30.8%)
Mutual funds, domestic DIIs, and foreign FIIs hold 30.8%, providing strong governance scrutiny.
Areas to Watch & Potential Risks
Subdued Capital Efficiency (ROCE: 6.6%)
A sub-12% ROCE suggests return on capital barely exceeds the company's weighted average cost of capital (WACC).
Elevated Financial Gearing (D/E: 2.19)
Debt-to-Equity exceeds 0.9x, meaning substantial operating earnings are absorbed by mandatory interest coverage.
Quantitative Strategy Eligibility
Checking GRASIM against established Indian wealth creation frameworks:
Coffee Can Investing Framework
Fails 10%+ revenue growth or 15%+ minimum capital return benchmark over historical periods.
Quality Factor Screener (High RoIC + Low Debt)
Scorecard of 60/100 or leverage profile sits below strict quality index hurdles.
GARP / Value-Growth Blend
Valuation multiple or return metrics require further cyclical pullback.
Construction Materials Sector Peer Comparison
Compare GRASIM directly against top industry peers by market capitalization:
| Company | 5-Pillar Score | Market Cap | P/E | ROCE | D/E | Scorecard |
|---|---|---|---|---|---|---|
| Grasim Industries Ltd. (GRASIM)Current | 60/100 | ₹2.24 Lakh Cr | 39.36 | 6.6% | 2.19 | — |
| UltraTech Cement Ltd. (ULTRACEMCO) | 69/100 | ₹3.38 Lakh Cr | 39.55 | 12.1% | 0.30 | View |
| Ambuja Cements Ltd. (AMBUJACEM) | 72/100 | ₹1.01 Lakh Cr | 23.05 | 5.0% | 0.00 | View |
| Shree Cement Ltd. (SHREECEM) | 61/100 | ₹87,893 Cr | 53.92 | 10.6% | 0.07 | View |
| J.K. Cement Ltd. (JKCEMENT) | 64/100 | ₹40,803 Cr | 43.15 | 13.7% | 0.86 | View |
| Dalmia Bharat Ltd. (DALBHARAT) | 63/100 | ₹35,169 Cr | 37.69 | 7.1% | 0.38 | View |
Frequently Asked Questions: Grasim Industries Ltd.
Q:What is the 5-Pillar Fundamental Score for Grasim Industries Ltd. (GRASIM)?
Grasim Industries Ltd. has a RupeeTools Fundamental Score of 60/100, placing it in the 'Moderate / Average' category. Its pillar scores are: Profitability (48/100), Financial Health (45/100), Growth (79/100), Valuation (62/100), and Ownership Quality (78/100).
Q:Is GRASIM fundamentally strong for long-term investment?
GRASIM currently holds a moderate quality rating of 60/100. While it operates in the Construction Materials sector, investors should monitor its debt health before initiating long-term positions.
Q:Does GRASIM pass the Coffee Can Investing filter?
No. GRASIM does not currently meet the strict 15% ROCE and 10% sustained topline compounding threshold mandated by the Coffee Can investing framework.
Q:How does GRASIM compare against other Construction Materials peers?
Within India's Construction Materials sector, GRASIM trades at a P/E of 39.36 and generates an ROCE of 6.6%. Compare its 5-Pillar score of 60/100 against top sector peers like UltraTech Cement Ltd. (69/100), Ambuja Cements Ltd. (72/100).
Regulatory & SEBI Research Analyst Compliance Disclaimer:
This 5-pillar fundamental score is an automated quantitative health check generated purely from historical public financial statements, corporate filings, and exchange disclosures for educational and informational purposes only. It does NOT constitute investment advice, a stock recommendation, or a solicitation to buy or sell securities. RupeeTools is not a SEBI-registered Research Analyst. Please consult a SEBI-registered financial advisor before making investment decisions.