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Grasim’s standalone operational numbers for 2QFY09 are below our expectations, with EBITDA margins of 21.6%,
impacted by severe cost push in all businesses. Revenues grew 8.4% YoY to Rs26.8b, driven by 17% growth in
cement revenues and 45% growth in sponge iron revenues. EBITDA declined 26%YoY to Rs5.8b leading to 10pp
YoY (~740bp QoQ) contraction in margins to 21.6%. However, higher other income and lower tax provisioning
restricted PAT decline at 16% to Rs4.2b.