Stocks in focus: Aditya Birla Nuvo, Grasim, JK Lakshmi Cement

Agencies | Updated on January 17, 2018



Shares of Aditya Birla Nuvo ended down by nearly 18 per cent whereas Grasim stock ended marginally higher.

Earlier in the day, shares of Aditya Birla Nuvo fell sharply by nearly 25 per cent today after the $41-billion Aditya Birla Group announced plans to merge the company with Grasim Industries to create a nearly Rs 60,000-crore diversified entity that will be among the largest in India.

The scrip of Aditya Birla Nuvo dived 24.63 per cent to Rs 1,180 on the BSE. On the NSE, it plunged 24.68 per cent to Rs 1,176.75.

At the closing trade, the stock was down 17.6 per cent at Rs 1,290.15 on the BSE. On the NSE, the stock ended lower by 18.31 per cent at Rs 1,276.40.

Shares of Grasim also tanked 8.34 per cent to Rs 4,160.

The stock ended up by 0.57 per cent at Rs 4,565 on the BSE. On the NSE, the stock closed down by 0.21 per cent at Rs 4,530.

As part of the plan, financial services business of the merged entity will be hived off and merged with Aditya Birla Financial Services (ABFSL), a wholly-owned arm of ABNL and will be listed subsequently.

The boards of Aditya Birla Nuvo Ltd (ABNL) and Grasim Industries have approved a composite scheme of arrangement between the two firms and ABFSL.

“The proposed restructuring will create one of India’s largest, well-diversified companies with a healthy mix of business with steady cash flows and long term growth opportunities,” Aditya Birla Group Chairman Kumar Mangalam Birla had said yesterday.

With diverse businesses spanning manufacturing and services, the combined company provides a play on India’s growth story, he added.

Post merger, with an aggregate turnover of Rs 59,766 crore (for the year ended March 31, 2016), Grasim will become the number one cement company with the largest selling brand, among the top 10 diversified private NBFCs in India, top four private sector life insurers and asset management companies and number three telecom operator in the country, the Aditya Birla Group had said in a statement.

JK Lakshmi Cement

Shares of JK Lakshmi Cement gained on June quarter profit.

JK Lakshmi Cement Ltd rose as much as 3.7 per cent to Rs 454.

The company has swung to June quarter profit, boosted by an increase in cement prices in its key north India market.

JK Lakshmi will continue to report improved realisations, as its key northern market saw another round of price increase in July, say analysts at Kotak Securities.

The brokerage, has however, downgrades the stock to “Add" from “Buy” after a 30 per cent rally over the past 3 months; it has raised the price target to Rs 480 from Rs 410.

The stock trades at a premium to peers on valuation metrics such as EV/Sales, PE, and price/book over next 12 months, according to Thomson Reuters data.

Published on August 12, 2016

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