Jindal Iron & Steel surged on Friday amid good volumes.
The scrip of the steel major was up by 6.9% at Rs 94 on the BSE by mid-morning trades. It touched Rs 95.55 earlier, which is a multi-year high. The scrip clocked a higher volume of 2.19 million shares in slightly over two hours of trading.
The Jindal Iron & Steel stock has surged sharply in the last few months on the back of firm local and international steel prices and its improved financial performance. From a low of Rs 5.45 on 28 March 2002, the stock has gained a staggering 1,624% in less than a year to the current Rs 94. The stock has seen intermittent surge in daily trading volumes. Average daily volume of the stock for the month ended 14 February 2003 (comprising 22 sessions) was at 1.04 million shares. Dealers said that speculators were active on the counter.
As per market sources, local brokerage Enam Securities is said to be acquiring the stock.
For Q3 ended 31 December 2002, Jisco reported a net profit of Rs 29.86 crore, compared to a net loss of Rs 15.34 crore in the corresponding period last fiscal. Market expectations were that the company may post a net profit of close to Rs 30 crore. Total income (net of excise) increased by 59.7% from Rs 259.20 crore (Rs 2.59 billion) in DQ-2001 to Rs 413.98 crore (Rs 4.13 billion) for DQ-2002.
Recently, Unit Trust of India approved a financial restructuring package for Jisco, which included a reduction in interest rates. The company had a total debt exposure of Rs 512.28 crore (Rs 5.12 billion) to UTI by way of 10.5%, 14.25% and 13% non-convertible debentures. As per the restructuring proposal, an average interest rate of 10% is to be charged as against the existing average rate of 13%. In 2001 and 2002, the erstwhile ICICI and IDBI had restructured Jisco' debts.
Jisco, at a recent analysts' meet, had said that it remains bullish on the international steel market. It also said the supply - demand equation in the domestic market may push up steel prices.
Global crude steel production is projected to increase by 2% to 912 million in 2003 from 894 million tonne in the corresponding previous year. China has been the main driving force in global steel production and consumption. The country's steel production is projected to increase by 9.6% to 195 million tonne during the above period.
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