The market simply is in no mood for diversifications and acquisitions in the current circumstances; it wants companies to just do business as usual and concentrate on increasing profit margins and not extending leverages.
That’s the mood on the counters of JK Cement. The market has given the stock a vehement thumbs down over its decision to foray into paint manufacture. Like Grasim, JK Cement’s Board on Saturday approved its foray into business of paint.
And for this, it has approved an investment of up to Rs.600 crore spread over the first 5 years.
The market has similarly got annoyed with Grasim when last year, it announced its decision to enter into the paint business on an initial capex of Rs 5,000 crore which will be invested over the next three years.
The stock, which has closed on Friday at Rs.2638.25, opened lower and soon went on to hit a new 52-week low at Rs.2390.