FINANCE & STOCK ADVICE: MY VIEW ON GRASIM

Introduction of the company

Grasim Industries is one of the favorite stock of the traders. The brand is under the leadership of Adity Birla Group.

Financials

The financial performance of Grasim for the first quarter ended 30^th June 2008 has been flat. The high cost of raw materials and the overall slowdown in the economy seems to have taken a toll.The company’s revenues for the quarter were at Rs. 4,430 crore (Rs. 4,060 crore). Net profit was marginally higher at Rs. 672 crore (Rs. 670 crore).

Caustic soda volumes were higher by 11% and realizations were up by 30% at Rs. 22,352 per ton. Though the production and sales of cement was up at an average of 3%, margins were under pressure due to continuous rise in coal prices along with higher freight, employee and packing costs. Cement production and dispatches for the month of August 2008 stood at 21.19 lakh mt and 21.88 lakh mt, registering a decline of 8.87% and 5.39% on a YoY basis.

The Viscose Staple fibre (VSF) performance during the quarter was muted. Production was curtailed due to lower off-take. The liquidation of accumulated inventory in the value chain, substitution of VSF with other fibres on account of high VSF prices and general slowdown of the economy impacted the performance. Margins were depressed due to the record increase in sulphur prices and higher prices of other key inputs like pulp and caustic. Margins are likely to remain under pressure in the short to medium term.

Subsidiary

The performance of UltraTech Cement Limited, a subsidiary of Grasim, improved marginally. Domestic cement sales were higher by 4% but exports were affected due to the ban imposed by the Govt for six months.Though Profit margin was flat.

The production of sponge iron was lower by 27% due to planned maintenance shutdown and sales volumes declined by 35%. Realizations were high by 62%. The company is planning to hive off this division on a slump sale basis.

In current Q2, margins are expected to remain under pressure but if the company manages to sell off its sponge iron business, this one time gain would help bolster the performance.

My view

From above discussion I found the stock fundamentally strong and would advice the readers to stay invested.

Disclaimer : I do not have any personal holding in the stock.

MULTI BAGGER STOCK GROUP

Some of my group's multi bagger picks during the rally were NMDC , MMTC , STC , Larsen ,Jindal Steel & Power , Unitech , BF Utilities , Jai Corporation , Walchand Nagar Industries, RNRL , Reliance Infra (Reliance Energy) etc.

I had been long associated with a corporate engaged in financial services , where with the assistance of specialized tools along with my special analysis as per some historical accepted theories of stock market like W. D. GANN's Theory , Elliot Wave Theory and others are used with reliable insider information of so called " operators" who play a major role to make a stock ,a Multi Bagger ,I do make my gem picks in this market.

I had been running my group , where the associated people get the reliable and most beneficial to get the unexpected return as seen in the above mentioned tips. Say for example the stock called MMTC had jumped from 2000 level to 56000 per share of historical price where the capital appreciated by 28 times in very short period with 2700% return on capital employed. Likewise in RNRL we started accumulating at RS 25 level from where we saw it moving at 250 level giving 10 times with 900% return.

These sort of return is helpful as ,

1. Handsome gain will make a jack to our capital.

2. Limited stocks trade , as daily trade could be avoided , which is more risky.

3. Long term capital gain , so no tax liability.

4. Whole income in white, which could be further deposited into fixed deposit to get assured monthly income later.

5. Strong income tax file without paying any taxes.

Our role here could be summarized as :

1. Giving tips to all registered member at proper time , when the stock is just about to take off, neither too early not too late.

2. Make sure investor do not gt stuck into it.

3. Recommend to exit when the operator is about to leave it.which is the most important work or else the whole accumulated and deemed profit will be washed away along with part of investment and will remain stuck for long - long period.


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MY VIEW ON GRASIM