Tisco sees increase in output

Irani said the mill, which produces specialised steels that are imported by Indian vehicle and heavy appliance manufacturers, would achieve its full capacity of 1.2 million tonnes a year within 13 months.

Irani said the cold-rolled mill would start commercial production in the middle of 2000/01 but products rolled until then would also be sold in the market. He said the new mill would make an operating profit in 2000/2001, but did not give details.

The managing director said the new mill would further boost the firm8217;s profitability. quot;We have always made a profit, even during bad days, and this year we will improve our profit and next year, with the cold-rolling mill, it will improve even further. TISCO is on an ascending track.quot;

Irani said Tisco would post strong growth in the next few years but its shares were undervalued. quot;The economic indices are up and steel is linked to economic growth. The steel sector is booming and prices have increased,quot; he said.

quot;At prices around Rs 120, it is definitely undervalued. Financial analysts say the correct valuation should be about Rs 250 Rupees,quot; Irani said.

TISCO shares traded at Rs 111 at 3:30 pm on the Bombay Stock Exchange, down Rs 5.15 from the previous close.

A company statement said the installed cost of the new mill was Rs 10500 244 per tonne compared with 350-450 per tonne in projects of comparable capacity elsewhere in the world.

To begin with, lower grades of steel will account for 70 per cent of the output, but in three to four years, their share will fall to less than half, company officials said.

TISCO8217;s steel sales were up five per cent at 2.79 million tonnes in 1999/2000 but the firm is yet to unveil financial results for the year. A Reuters poll of 15 brokerages in late March forecast net profit to rise 20 per cent to Rs 3.50 billion 80.20 million but saw sales dropping a marginal 0.98 per cent to 62.13 billion Rupees.