Motilal Oswal has issued a buy rating on Grasim Industries with a target price of ₹3,800 in its research report dated September 11, 2026. According to the brokerage's analysis, the company expects VSF profitability to remain resilient, supported by relatively tight supply conditions and lower inventory levels in China, which should help sustain higher VSF realizations. The research report indicates that stable pulp prices and lower caustic soda ash prices are estimated to support margin expansion in the VSF business.
In the chemical segment, lower caustic soda ash prices (down ~17% QoQ in 2QFY27'QTD) would hurt realizations, as reported by Motilal Oswal. However, the brokerage expects that backward integration, increasing captive consumption of intermediates, and healthy growth in downstream products should support margins. The company remains focused on market share gain in the paints segment, with expectations of strong pricing-led revenue growth in 2QFY27. However, Grasim could face short-term losses from higher costs in the paints segment during this transition period.
Motilal Oswal estimates the company's standalone revenue/EBITDA/PAT CAGR at ~15%/35%/107% over FY26-28. According to the research report, the company expects standalone netdebt to peak out in FY27 and start reducing from FY28. The net debt-to-EBITDA ratio is estimated at 2.0x in FY28 vs. 4.1x in FY26. The brokerage reiterates its BUY rating on GRASIM with their SoTP-based target price of ₹3,800.
