Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Steel: Signs to cheer? - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Dec 13, 2001

    Steel: Signs to cheer?

    Steel production for the first time in the current fiscal has recorded higher growth rate of 2.2% in September 01, after reporting a dip of 1.4% in August 01. Growth of finished steel production has remained flat in the first six months of the year.

    September was infact the second month after July when the production recorded growth. All the segments of the steel, especially GP/GC sheet showed encouraging growth rates in September. During April-September 2001 the finished steel production marginally fell by 0.03% to 14.6 m tonnes. However, production of bars & rods and GP/GC sheets recorded healthy growth of 10.7% and 22.8% respectively during the same period. CR sheets & coils production also grew by 6.7%. Although steel production edged higher, realizations continue to remain flat with marginal improvements.

    Signs of improvement
    ('000 tonnes) April-Sept '00 April-Sept '01 Change Growth in Sept '01
    Steel structurals 1,153 1,037 -10.0% 13.0%
    Bars & rods 4,501 4,985 10.7% 5.5%
    HR coils 4,133 3,807 -7.9% 4.8%
    HR sheets 255 250 -2.0% 4.3%
    CR sheets/coils 1,955 2,087 6.7% 1.6%
    GP/GC sheets 746 916 22.8% 34.2%
    Finished steel 14,615 14,611 0.0% 2.2%

    Positive growth rates in this core sector to an extent indicate signs of economy bottoming out. However, anti dumping duties imposed by US is likely to trim the steel production growth rates. Also, removal of quantitative restrictions is hitting the steel industry through cheap imports. So in order to protect the Indian steel industry, directorate general of anti-dumping and allied duties (DGAD) has recommended imposition of provisional duties against imports of cold roll flat products from US, European Union, Japan and Canada.

    Nevertheless, excess capacity in the steel industry globally is likely to impact steel prices in the near term and consequently financial performance of steel majors. Therefore to hedge risks in steel business, companies are looking at diversification. Tisco had earlier indicated its plans to foray into telecom business and now is evaluating plans to make investments in the retail business. The company has a little experience in retailing garments and leather through its international trade division, which is now with Tata International. It may make investments in various retail ventures like the Tata's Westside chain of stores. Although, the retail segment in India has offers good growth potential, the segment is highly competitive with numerous international and domestic brands. It remains to be seen whether Tisco is able to venture into this area successfully.

    Steel production has grown at a healthy rate in September and is likely to show further improvements with a pick up in infrastructure activity. However, with realizations remaining subdued, companies are discouraged to make further investments in the sector and opting for diversifications.



    Equitymaster requests your view! Post a comment on "Steel: Signs to cheer?". Click here!


    More Views on News

    Tata Steel: A Strong Quarter (Quarterly Results Update - Detailed)

    Aug 12, 2017

    Tata Steel reported a robust operating performance on the back of strong domestic and European operations.

    SAIL: Loss at EBITDA Level Due to Higher Raw Material Cost (Quarterly Results Update - Detailed)

    Jun 12, 2017

    The company registered a negative EBITDA of Rs 2.64 billion during the quarter. This is on the back of an increase in raw material prices.

    Tata Steel: Strong Quarterly Performance (Quarterly Results Update - Detailed)

    May 22, 2017

    Tata Steel reported a robust operating performance on the back of strong domestic and European operations.

    SAIL: Pressure Continues. Loss at Operating Levels... (Quarterly Results Update - Detailed)

    Feb 15, 2017

    SAIL has reported a 26.2% YoY increase in the topline while the bottomline reported a loss of Rs 7.94 billion.

    Tata Steel: Loss from Discontinued Business Mars Performance (Quarterly Results Update - Detailed)

    Sep 27, 2016

    Tata Steel has reported a 6.3% decline in the topline while the bottomline was in red in 1QFY17.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)