Grasim slumps as water levels drop

Grasim is not doing too well today morning. The stock is down 1.5%currently at Rs.3612 and this recoup is after having hit an intra day low at Rs.3590.

The stock is reacting to the company’s announcement of Friday that it plans to shut down its plants at Nagda in Madhya Pradesh due to water shortage and it has started reducing production of staple fibre in a phased manner at the plant. The production will be fully suspended from 30th April and will resume only after monsoon arrives and there is availability of water. This will consequently affect the operations of its chlor alkali plant and that too will run, depending on water availability.

The company will continue to cater to the requirements of all its customers from its other staple fibre plants located at Kharach and Vilayat (Gujarat) and Harihar (Karnataka). The company will complete major modifications of two lines and other major repair work during the period.

The company is scheduled to declare its numbers on 2nd May.