Why is Jefferies bullish on Grasim Industries: 3 reasons fuelling the 25% upside potential

Global brokerage firm Jefferies has turned bullish on Grasim Industries. The brokerage has given the stock a ‘Buy’ rating with a price target of Rs 3,500 per share. This implies an upside potential of nearly 25% from current levels.

According to the brokerage, Grasim’s paint business, Birla Opus, is evolving into a powerful growth engine, with multiple strategies in place to capture market share in India’s competitive paints space.

So, what exactly makes Jefferies optimistic about the stock? Let’s take a look at the key reasons behind this call –

Jefferies on Grasim Industries: From a paint brand to a full ecosystem

According to the brokerage report, Birla Opus is no longer positioning itself as just another paint brand. Instead, it is shaping up as a complete “paint + service” platform.

Furthermore, the company has integrated products, branded painting services, financing, insurance, and even technology-backed tools to simplify the customer journey.

As Jefferies noted, the goal is “to scale share and become a profitable No. 2 player (Rs100bn revenue by FY28).”

Jefferies on Grasim Industries: Premium focus and capacity expansion

Grasim’s paint arm has also been making its presence felt in the premium category. According to the brokerage, “premium ranges including Calista are already driving ~65% of Opus sales and have achieved strong unaided brand recall within a year.” This is significant in a Rs 700–750 billion paint market, where nearly 25% still remains unorganised.

With its new Kharagpur plant expected to lift capacity share to nearly 24%, the company is setting itself up for long-term expansion.

Jefferies in its report noted that “Opus’ top priority is share gain in the near term, irrespective of quarterly aberrations.”

Jefferies on Grasim Industries: New initiatives

Now, what sets Birla Opus apart? According to Jefferies, the unique initiatives designed to win customer trust is a key point to consider. One of them is “Opus Assurance: Tech-backed paint job insurance with a digital certificate, where Opus commits to redo jobs if needed – removing consumer worry about longevity and quality.”

The company has also rolled out a financing platform that allows customers to opt for interest-free EMIs, bringing structure to what has traditionally been a highly unorganised market.

The brokerage in its report pointed out that this initiative not only improves affordability, it also enhances transparency through certified service providers.

Adding to this, branded painting services are becoming a core offering. Priced with transparent GST rates, they include surveys, service warranties, and digital project tracking.

As the brokerage highlighted, “Opus is already present in 8,000+ towns with ~50,000 dealers, 350+ stores offering painting services, and significant automation across manufacturing plants.”

The company is also leveraging its Experience Centres, designed to inspire rather than sell. The brokerage added, “the centre is not a retail selling station, but spaces to inspire customers to buy Opus brand.”