Tisco moved up and down on Wednesday and high volumes accompanied the scrip on its roller-coaster ride.
Around mid-afternoon trades, Tisco slipped 0.07% to Rs 148.85 on BSE. The stock's fall came after the scrip surged to Rs 150-plus levels in early afternoon trades as Railway minister left freight rates unchanged in the Railway Budget presented in Parliament today.
This is contrary to expectations of a hike in freight rates in the Union Budget. The scrip surged in early afternoon trades after it came under selling pressure in morning trades. It fell as much as 1.47% to a low of Rs 146.75.
But the scrip failed to sustain higher levels and came off in mid-afternoon trades. Volumes, however, surged, to 2.76 million shares on BSE. That is the highest daily volumes recorded over the last few days. Dealers say unwinding of remaining positions in the Futures and Options market today has had some impact on the cash market. The Sensex was down 9 points to 3,272.91 at the time of writing.
However, majority of the positions in F&O are already squared off, dealers say. And these have been shifted to the March 2003 contracts.
In Tisco, however, players had built huge buy positions in the F&O segment. Squaring off of these positions has hurt the counter according to market men.
Tisco shares have come off over the last few trading sessions after the scrip proved firm on the back of a strong trend in domestic and international steel prices. The scrip, from a recent high of Rs 156.15 on 19 February 2003, has come off to the current Rs 149 level.
The Indian steel sector has witnessed a turnaround over the past year following sustained demand for steel coupled with a sustained hike in steel prices over the last year. This month, Tisco reported a hike in flat steel prices by Rs 1,000-1,400 per tonne, effecting a second major price hike in 2003. The market was, in fact, expecting a major price hike by flat steel producers.
Analysts feel Tisco will outperform the overall steel sector in the current year due to the sustained rise in steel prices in the domestic as well as in the international markets. Market share and revenues are expected to improve in the current year, with revenues increasing by 10-15%. The company will also prove to be a major beneficiary following high value addition and increasing bottom line in 2003.
For the third quarter ended 31 December 2002, Tisco posted an impressive net profit of Rs 280.23 crore (Rs 2.8 billion) as against Rs 34.54 crore in the corresponding period of the previous year. Net sales rose by 27% to Rs 2,152.69 crore (Rs 21.52 billion), from Rs 1,694.63 crore (Rs 16.94 billion) in DQ 2001.
BSE code: 500470
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