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Grasim: Cementing its hold

Grasim Industries' decision to expand its cement capacity may be viewed favourably from a long-term perspective.

The company plans to add close to 3.3 million tonne over the next 18 months. This would make a major change in the business profile of the company and strengthen its presence in the cement business. The move of Grasim to strengthen its cement business co uld also be viewed as a precursor to further restructuring within the group to impart a higher degree of focus. The benefits, however, are likely only over the next to two to three years though the move will place Grasim at the top table in terms of capa city. In the near term, the stock may be impervious to these long-term capital expenditure plans announced by the company.-- BL Research Bureau