Shares of this Aditya Birla Group stock under the ‘large-cap’ category are in focus after the company to inaugurate three Paint Plants in Haryana, Punjab, and Tamil Nadu today. In the past six months, the company’s stock rose nearly 20 percent.
With a market capitalization of Rs 1.45 lakh crores, the stocks of Grasim Industries Limited started their trading session on Thursday at Rs 2,230.60 and gained up to 2.40 percent in the session today witnessing an intra-day high price of Rs 2,244.95 apiece.
In a recent filing with the Bombay Stock Exchange (BSE), the company intimated about Mr. Kumar Mangalam Birla, Chairman of the company, to launch the “Birla Opus Paints” business and inaugurate three Birla Opus Paints plants today at Ludhiana (Punjab), Panipat (Haryana), and Cheyyar (Tamil Nadu).
With the launch and prospects of increased competition, Asian Paints, the market leader in the paint industry with a 40 percent market share, is likely to face tough competition from the Birla Group company.
“While success is not guaranteed, the sheer magnitude of this investment by Grasim will likely push the new competitor to adopt an aggressive stance to ramp up,” said Jefferies, one of the well-known International Brokerages.
Moreover, the Brokerage retained its ‘underperform’ rating on Asian Paints with a target price of Rs 2,500 implying a 16 percent discount from the current market price of Rs 2,970.
During the recent financial quarters, Grasim Industries posted a stellar performance as far as the basic business parameters, viz, operating revenues and net profits are concerned.
The former rose from Rs 30,220 crores during Q2FY24 to Rs 31,965 crores during Q3FY24 and the latter, during the same period, took a drastic shift from Rs 2,028 crores to Rs 2,604 crores.
Grasim Industries Limited is an India-based company engaged in the business of manufacturing cement and viscose staple fibre (VSF). The activities of the group fall under various segments including viscose, chemicals, cement, financial services, and others.
The company derives key revenue from the ‘cement’ segment covering products like grey cement, white cement, and allied products. Recently, the company has forayed into the paint business with aggressive investments in the industry.
Written by Amit Madnani
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