Tata Steel has reported a sharp drop in net profits for the year ended March 2002. The main reason for the decline has been the sharp decline in sales towards the end of the year. This is clearly evident from the last quarter results.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares
Diluted Earnings per share*
The steel sector, until recently, has been witnessing trying times over the last couple of months due to the global slowdown. To make matters worse several countries have imposed anti dumping duties. This has limited export opportunities for domestic steel companies. However, off late there has been a spurt in steel prices on the back of a pick up in economic activity.
Tata Steel however has limited the impact by focusing on cost cutting and improving its product mix. According to the company's management, the performance compares very well against its global peers.
In the coming months the company is likely to benefit from the recent firming up of prices and a further improvement in product mix. However, whether the global economy will actually turnaround in the second half of the year is still uncertain and any adverse development could have a significant impact on the company's performance.
The stock presently trades at Rs 107, implying a price to earnings ratio of 19x on full year FY02 earnings.
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