The Tata Steel share rose over 5.34 per cent to Rs 125.20 on the Bombay Stock Exchange (BSE) today following bargain hunting spurred by expectations of a hike in the prices of steel in August. The counter clocked a volume of 15.92 lakh shares.
Earlier, the scrip had plunged 17.9 per cent from Rs 144.90 on July 4, 2002, to Rs 118.85 on July 30, following drought fears and the global meltdown in stocks.
The company had earlier said that it proposes to hike steel prices in August 2002. It has already hiked steel prices by 4 times in the last four months following a rise in international steel prices.
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Yet, the concern over scanty rainfall in the country continues to keep the old economy stocks depressed.
At the time of announcing its first-quarter results, Tata Steel said steel prices in the quarter ended June 30, 2002, have reached the same level as that of the corresponding previous quarter.
For the first quarter, the company reported a spectacular 105 per cent spurt in profit before tax. It also posted a 16 per cent increase in sales to Rs 1,623.64 crore. The increase in sales was partly attributed to a spectacular 52 per cent spurt in exports to Rs 183.98 crore.
In volume terms, the company's sales (inclusive of exports) increased by 12.3 per cent to 7.71 lakh tonne during the period under review. However, during this period, its production increased by 0.38 per cent to 8.23 lakh tonne only.
The company offloaded the inventory pile-up, and hence its sales growth outstripped production growth.
Tisco is reported to have reworked its export targets due to possible trade restrictions by major steel importing countries. The company now plans to export 16 per cent of the total production of its 1.2-million-tonne cold rolling mill in FY 2002-03.
During the subsequent two years, the share of exports from this mill will come down to about 12 per cent. Earlier, when the project was conceived, the company had planned to export 30 per cent of the production from the mill.
According to the company, about 15 per cent of its total steel production is likely to be exported every year. These exports include exports to Western Europe and the US. As a result, CR exports to the US are not likely to exceed 50,000 tonne, which is about 5 per cent of its total CR production.