The stock of the Tata group steel major was up by 1.5% at Rs 158.75 on the BSE in afternoon trades. But the scrip slipped from the day's high of Rs 159.90. A higher volume of 1.12 million shares was recorded on the counter by 13:50 IST.
On Thursday, the Tisco scrip gained 1.2% at Rs 156.40. The stock has ruled firm of late, having witnessed a sustained rise on the back of rise in steel prices and a change in product mix, focussing more towards value added products. The scrip currently trades at a 52-week high of Rs 161.
On Thursday, the company's board also approved a balance sheet restructuring proposal which is to adjust the debit balance of Miscellaneous Expenditure Account (to the extent not written off or adjusted as at 31 December 2002 and accretions / variations thereto during the period 1 January 2003 to 31 March 2003) not exceeding Rs 1,550 crore, against the balance standing to the credit of the Capital Redemption Reserve Account and Securities Premium Account of the company as at 31 March 2002.
The proposal is subject to the approval of the company's shareholders and Bombay High Court and such other regulatory authorities, as may be required in accordance with the law.
This month, Tisco and other flat steel makers like Sail reportedly hiked flat steel prices by Rs 1,000-1,400 per tonne, effecting a second major price hike in 2003. The market was, in fact, was expecting a major price hike by flat steel producers.
On the back of firm steel prices and an enriched product mix in favour of valued added products, Tisco reported robust Q3 (ended 31 December 2003) results. Cost control also contributed to the surge in net profit. For Q3 ended 31 December 2002, the steel major posted a net profit of Rs 280.23, compared to a net profit of Rs 34.54 crore in the quarter ended 31 December 2001, recording a massive 711% rise. The company reported a 27% increase in total income to Rs 2,152.69 crore (Rs 21.52 billion).
At the time of announcing its Q3 results, Tisco said that in Q4 ending 31 March 2003, steel prices will remain at the same levels or marginally higher than in the December 2002 quarter. However, volumes will be higher. In the current scenario, steel prices are likely to remain firm in the next five to six months, it said.
Tisco plans to utilise its cash profit towards capital expenditure and prepayment of high cost debts. The company has already repaid debts of Rs 500 crore (Rs 5 billion) and incurred capital expenditure of Rs 380 crore (Rs 3.8 billion). Meanwhile, Tisco has also decided to focus on the Chinese market since quantitative restrictions have been removed and also since China has a huge demand-supply gap.
The company is planning to expand its capacity at Jamshedpur works by 2 million tonne. The hike in capacity is mostly for flat products.
BSE Code: 500470
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