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Dr. Jai Maharaj · Guest

Steel growth to slide by 0.2%: CMIE

The Pioneer
Sunday, November 13, 2005

Indraprasth (Pioneer News Service) - Because of rising
material cost and falling steel price, there might be a
fall in steel production growth by 0.2 per cent by the
year end, a leading economic think tank has said.

Centre for Monitoring Indian Economy (CMIE) said in its
monthly review that the cumulative production growth may
see a decline from 6.2 per cent in April-August 2005 to
around 6 per cent by the year end.

"Growth and profitability are likely to remain under
pressure in September quarter as well as prices are not
likely to firm up in the near future," it said.

The slide in steel prices also led to record declines in
sales and profits in the quarter ended Sept 2005.
Aggregate interim results of 26 steel companies for this
quarter reflected a marginal 1.7 per cent decline in the
net sales, while operating and net profits recorded 15.3
per cent and 24.3 per cent respectively, the analysis
said.

For September 2005, the expense-sales ratio was 75.1 per
cent, compared to 73.3 per cent a year ago and profit
margins were the lowest recorded in the last five
quarter, it said.

State-owned Steel Authority of India Limited's operating
profit fell by 6.6 per cent, mainly on account of sharp
9.4 per cent rise in expenses, CMIE said.

The expense-sales ratio in the September 2005 quarter
amounted to 72 per cent, compared to 68.8 per cent last
year, it said.Compared to SAIL, private steel major TATA,
was able to post healthy net profit growth of 12.5 at Rs
1045.4 crore, even though

its sales growth slipped to 3.4 per cent from 43.1 in
September 2004 quarter, CMIE said. The net profit margin
remained very high at 26.2 per cent, compared to 24.5
last year due to help from from other income more than
doubling to Rs 118.8 crore, CMIE said.

Among the other leading companies in the sector, Ispat
Industries incurred an operating loss of 20 per cent
decline in sales, accompanied by a 15.5 per cent rise in
expenses, it said.

The expenses-sales ratio was 106.6 per cent, compared to
73.8 per cent in the Sept 2004 quarter, the economic
think tank said. Essar Steel, however, posted a sharp
46.6 per cent increase in net profit mainlydue to its low
expenses cost in the Sept. 2004, it said.

CMIE held declining international prices responsible for
the present slump in the domestic steel industry. During
the quarter ended September, prices of most steel
products were significantly lower than their levels last
year.

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blash · Guest

Dr. Jai Maharaj advises:

<<Centre for Monitoring Indian Economy (CMIE) said in its monthly
review,,,,,,,,,,,,,,,,

Gosh thanks for the info,,,,,,,,,,the CMIE monthly review is the
business bible for stock traders.........Somehow I missed it this
month......I just don't know what I would have done without it......

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