UBS has upgraded Grasim’s rating from `Neutral’ to `Buy’. It has also removed the short-term `Sell’ rating. This was on account of a significant underperformance since the fixing of the record date of the demerger of the cement business (May 14, 2010).



Further, its current valuation at US$80/t (US$115-140/t for other larger companies) looks compelling. UBS has however not changed its earnings or valuation estimates. It has lowered the price target from the earlier Rs 2,875 per share to Rs 2,300 per share after removing the value of the demerged cement business of Grasim (Samruddhi Cement, which listed last week).
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