Grasim Induestries- maintain buy

Buy Grasim Industries with a target price of Rs 2943 . For the quarter ended June 2008, we expect the company would report a net sales growth of 8.8% to Rs 44.3 billion mainly on account of higher cement realisation. We expect EBIDTA margin would depress by 530bps to 25.9% in Q1FY09 from 31.2% in Q1FY08 and EBIDTA would go down by 9.7% to Rs 11.4 billion in Q1FY09E due to higher raw material cost and coal price and increase in freight rate. PAT would go down by 12% to Rs 7.03 billion in Q1FY09E from Rs 7.99 billion in Q1FY08.