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Business News/ Markets / Stock Markets/  Grasim share price scales 52-week highs propelled by paint segment launch; Should you Buy, Sell or Hold the stock?
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Grasim share price scales 52-week highs propelled by paint segment launch; Should you Buy, Sell or Hold the stock?

Stock Market today: Grasim scales 52-week high propelled by paint segment launch. Kumar Mangalam Birla, Chairman, Aditya Birla Group, on Thursday announced the launch of products and services under its new decorative paints brand, “Birla Opus”

Grasim Industries share price scales 52-week highs as Grasim launches paint businessPremium
Grasim Industries share price scales 52-week highs as Grasim launches paint business

Grasim Industries share price has seen almost 40% rise as it scaled 52-week high on Thursday. The launch of Paint business is adding to optimism on earnings growth.

Kumar Mangalam Birla, Chairman, Aditya Birla Group, on Thursday announced the launch of products and services under its new decorative paints brand, “Birla Opus", aiming for Rs.10,000 Crore gross revenue within 3 years of full-scale operations. 

Grasim Industries in its press release on Thursday highlighted that Aditya Birla Group set to disrupt Paint industry with 40% addition to Industry Capacity. 

Grasim is launching its paint product and inaugurating its  first paint plant (in Panipat) . Grasim will commission 2 other plants during 4QFY24 and 3 plants in next 12-15 months. It has already spent about 60% of planned capex of Rs10000 Crore for paint business.

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Analysts remain watchful and analysts at Jefferies India Pvt Ltd who have a target price of 2300 for the stock trading at close to 2165 levels in their note had said that as we are aware of Launch & initial plans for Grasim , the ground architecture plants being completed, details pertaining to  brands portfolio across multiple categories and supply chain, logistics, and distribution network coming into place, the dealer onboarding having commenced. Company will initially target certain areas in the North and South close to its factories and gradually roll out nationally; the initial target markets are bigger cities and towns. 

However their key questions to the management will be on Market leadership (yearly milestones), Loss funding (in initial years), Business Mix (B2B and B2C), dealerships, tinting machines, distribution (strategies) and Branding/Promotion.

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The confidence of investors meanwhile remains strong led by business prospects in its other businesses as that of cement represented by its subsidiary UltraTech Cement. Various other analyst have remained confident of earnings growth in this segment and others.

Analysts at Sharekhan post Q3 results had said that "they retain a Buy on Grasim with a revised target price of Rs. 2,600 as the pencil in upwardly revised UltraTech valuation and increased valuation of its other vital subsidiaries. 

Grasim's efforts to increase asset productivity and focus on increasing value-added products are expected to yield results as demand recovers, said analysts at Sharekhan. The company’s expedited paints expansion along with strong traction being witnessed in B2B E-commerce business are likely to provide Grasim with the next leg of growth. Further, the outlook for its key subsidiary UltraTech remains health, they added

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

 

 

 

 

 

 

 

 

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 22 Feb 2024, 03:33 PM IST
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