Tisco beats estimates, profit rises 50 pc

MUMBAI, MAY 17: Tata group flag ship Tata Iron and Steel Company Tisco has beaten market estimates by reporting a 50 per cent jump in it...

MUMBAI, MAY 17: Tata group flag ship Tata Iron and Steel Company Tisco has beaten market estimates by reporting a 50 per cent jump in its net profit at Rs 422.59 crore on a 10 per cent increase in sales at Rs 6,890.87 crore in the year ended March 31, 2000 compared to last year.

The board, which met today, decided not to recommend any final dividend. It had declared a 40 per cent interim dividend for the year 1999-2000. The net profit includes proceeds from the sale of net assets of its cement division to Lafarge for Rs 125.26 crore and profit on sale of long-term investments of Rs 10.22 crore, Tata Steel said in a statement here.

Its production rose by seven per cent to 32,62,000 tonnes while the sales increased by nine per cent to 32,10,000 tons for the year ended March 31, 2000 over the previous year.

Export turnover went up by 16 per cent to Rs 740.15 crore Rs 636.19 crore last year. Other income went down by 14 per cent to Rs 52.46 crore and total expenditure increased by six per cent to Rs 5,657.73 crore.

Profit before depreciation, interest, extraordinary items and taxes went up by 29 per cent to Rs 1,285.60 crore. Earnings per share as on March 31, 2000 rose to Rs 11.26 as against Rs 7.67 as on March 31, 1999. Reserves excluding revaluation reserves stood at Rs 4,040.43 crore as on March 31, 2000 as against Rs 3,796.45 crore as on March 31, 1999.

Tisco share moved up to Rs 105 on Wednesday from Rs 102.45 ahead of its annual results with analysts expecting only a 20 per cent jump in net profit. However, they said the shares will not appreciate significantly because of the fundamental constraints at the company.

The results were above market expectations. According to a Reuters poll carried out in late March, the steelmaker8217;s profits were estimated to rise to Rs 350 crore while sales were seen dropping marginally by 0.98 per cent to Rs 6,213 crore. Managing Director JJ Irani said the net profit was higher because of higher volumes and better prices.

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Analysts said TISCO also gained from the sale of its cement unit to the Indian subsidiary of France8217;s Lafarge S.A. However, they said the long term view was not encouraging since the firm was not competitive internationally.

quot;Fundamentally there is nothing much in the company with its huge labour force and high cost of production8230; I guess there must be some buying in its shares because it8217;s market price is ruling below its book value,quot; said an analyst.

TISCO shares are off more than 40 per cent from the year8217;s high of Rs 183.35 struck in January.