Tata Corus Steel
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=1254
Printed Date: 26/Apr/2024 at 4:34am
Topic: Tata Corus Steel
Posted By: prosperity
Subject: Tata Corus Steel
Date Posted: 01/Oct/2007 at 11:21am
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http://www.moneycontrol.com/india/news/commodities/us-financial-problems-wont-affect-steel-prices-experts/10/40/305659 - Steel prices to go up
Snip from above:
Irani: Overall the demand seems to be very strong.......I think in India, the steel demand will outstrip the steel production. ..... Therefore, I think India will face a situation where we will be importing steel over the next few months, and the imports will go up, and as a result, steel prices in India will certainly remain very firm. Goodwin: We think that globally, prices will be fairly stable. They may well pick up in the middle of the next quarter, in Q4. Generally, prices fall towards the end of Q4 as the western world celebrates the New Year and Christmas. We certainly think that flat products will remain quite strong and the import in the US market seems to be picking up again for flat product prices. Irani: But those companies that have raw material sources of their own, and are not impacted by these increases in the cost of raw materials, are obviously the ones that will gain the most, because they will benefit from the higher steel prices and not really have to pay too much more for their raw materials. |
Replies:
Posted By: PKB2000
Date Posted: 02/Oct/2007 at 9:19pm
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Dar lagta hay ---- Itna sari news on CRR hike, high interest aur so many manufacturer ---- lekin car sales are steady --steel Use ho raha hay kafi - Naya bridge bhi ban raha hay , gir bhi raha hay - do char aur girega to use duguna ho jayega -Lekin mamla commodity ka! That is the worry! BUT DAR KEYA HAY prosperity hay na! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: PKB2000
Date Posted: 04/Oct/2007 at 9:57pm
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I think all corus people will take Indian citizenship over the periods of time - where will they settle: At SINGUR? ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: prosperity
Date Posted: 04/Oct/2007 at 11:54pm
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http://www.moneycontrol.com/india/news/business/tata-group-looking-for-iron-ore-assets-abroad/304856 -
STRATEGIZE GETTING MORE_ORE FOR CORUS NEEDS
http://www.moneycontrol.com/india/news/business/tata-steel-looking-for-iron-ore-projectsatlantic-basin/306247 - SPECIFICALLY_IN_ATLANTIC_BASIN
(make CORUS also low cost producer by simply shifting production facility from CORUS to TATA STEEL)
http://www.moneycontrol.com/india/news/business/tata-steel-looking-to-secure-raw-material-linkages/301136 - RAW Material needs to be secured, specially for Corus Needs
http://www.moneycontrol.com/india/news/business/corus-eyeing-downstream-invst-for-indian-auto-sector/306259 - CORUS_INVEST_IN_INDIA_AUTO_SECTOR
http://www.moneycontrol.com/india/news/other-news/arun-gandhi-tatas-ma-kingcorus-deal-writer/303291 - The_Guy_Behind_the_CORUS_deal
http://www.moneycontrol.com/india/news/business/no-disturbancesglobal-steel-markets-tata-steel/300400 - Steel prices to go up http://www.moneycontrol.com/india/news/commodities/us-financial-problems-wont-affect-steel-prices-experts/10/40/305659 - And whole lot up !
http://www.moneycontrol.com/india/news/udayans-comments/commodities-will-be-extremely-hot/305356 -
Udyan_says_Commodities_will_be_VERY_HOT
http://www.moneycontrol.com/india/news/commodities/hot-rolled-coil-prices-to-rise-36;20-25-meps/304576 -
We have captive Iron Ore Mines hence http://www.moneycontrol.com/india/news/market-outlook/iron-ore-prices-to-rise-15-20-next-year-experts/302214 - Iron Ore prices wont impact Tata Steel
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Posted By: prosperity
Date Posted: 08/Oct/2007 at 9:23pm
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Tata Steel Limited has informed the Exchange vide its letter dated October 05, 2007 that : "The Board of Directors of the Company at its meeting held on 17th April 2007, had approved the issue of shares on a Rights basis to the existing shareholders of the Company through two simultaneous but unlinked issues of Equity Shares and 2% Cumulative Convertible Preference Shares". The Company has further submitted to the Exchange a copy of the Notice proposed to be published by them, regarding fixing of November 05, 2007 as the Record Date for the purpose of Rights Shares. A copy of the same shall be available on the NSE website (http://www.nseindia.com) under: Corporates > Latest Announcements and on the Extranet Server (/Common/Corporate Announcements).
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Posted By: PKB2000
Date Posted: 08/Oct/2007 at 10:32pm
Tatas are very fond of providing preferential shares / right issues.
Few days back I found a letter on ECS deposit of interests related to earlier preferential shares of TATA COFFEE ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: prosperity
Date Posted: 08/Oct/2007 at 1:06am
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Question 1: Can anyone guess the PE of Tata Steel ?
Question 2: If Tata Steel grows profits by ZERO percent for next 3 years - how much cash earnings per share would it add to its Balance Sheet ?
Question 3: If Indian Subcontinent's Infrastructure grows sharply, what would happen to Steel Demand over next 2 years ?
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Posted By: prosperity
Date Posted: 13/Oct/2007 at 10:19am
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Strong Story in the Making - http://www.moneycontrol.com/india/news/business/tata-corus-taking-big-steps-to-streamline-ops-/307914 - Tata-Corus taking big steps to streamline ops Didn't i tell this earlier ?
http://www.moneycontrol.com/india/news/business/corus-to-sell-its-germandutch-aluminium-smelters/307418 - Corus to sell its aluminium smelters - Increase Focus on CORE Area (Steel) and Gain on liquidating non-core Area !!
Read http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=307789 - UBS New Bullish Report
Read http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=306752 - Morgan Stanley Earnings Estimate
http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=306752 - |
Posted By: prosperity
Date Posted: 25/Oct/2007 at 1:53pm
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KISSED 4 DIGITS TODAY !!!!
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Posted By: Vivek Sukhani
Date Posted: 25/Oct/2007 at 2:00pm
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Congrats Prosperity....its really turning on screw now......the rights date is also coming nearer......
unadjusted for rights, the price targets which I will be following will be 1011, then 1052 and then 1151. Lets see!!!!!!
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Posted By: kannanravi1
Date Posted: 26/Oct/2007 at 2:18am
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Hi all,
Does anyone know how existing shareholders can apply for the rights issue? What is the process and due dates for this?
------------- kannan |
Posted By: Vivek Sukhani
Date Posted: 26/Oct/2007 at 9:53am
| the shares are getting ex- this Monday. This is what the BSE site is saying . Can someone please check and correct me if i am wrong. Novemeber 5 was the date. i am quite surprised how all these calculations are taking place. |
Posted By: prosperity
Date Posted: 27/Oct/2007 at 8:47pm
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This company is facing a very challenging situation right now -
CORUS - does NOT have captive ore and coke mines ..
This is first priority of Tata Steel Mgmt.
There are scouting for a raw material buyout !
Once they do that - even if this single digit PE company can remain single digit PE in the booming Steel Up Cycle - but still EPS would grow like anything - Dont forget Tata Steel before Merger with Corus was the LOWEST COST PRODUCER OF STEEL IN THE WHOLE WORLD !!
KannanRavi - You will get a letter from the company for the rights issue, just as rights from other companies ..
Vivekji - I had bought Tata Steel long long back - and forgotten it ....
I am lazy when it comes to Tata Steel and some other favourite businesses of mine !
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Posted By: kulman
Date Posted: 27/Oct/2007 at 8:59pm
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I had bought Tata Steel long long back - and forgotten it ....
I am lazy when it comes to Tata Steel and some other favourite businesses of mine !
------------------------------------------
Wow! Congrats!!
Prosperity Sir...let me seriously (for a change) share my personal experience: Most of the money for me was made in stocks by being lazy than being crazy.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: prosperity
Date Posted: 27/Oct/2007 at 9:04pm
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I am lazy with shares of those companies who drive their customers like crazy Eg: Companies which makes Mungerilals out of normal people.
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Posted By: kulman
Date Posted: 27/Oct/2007 at 9:12pm
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On a side note, would those kind of ventures considered as kind of vice? e.g. Sharaab, Cigarrettes, Bidis, Paan Masala....??
------------- Life can only be understood backwards—but it must be lived forwards |
ha ha. Good one!Posted By: Vivek Sukhani
Date Posted: 27/Oct/2007 at 10:24pm
| well as of now, tisco will get the benefit owing to overseas liabilities. prosperity, no god knows what P/e a stock should command in future, so wont get into this P/e related stuff at all. So long as its earning truck loads of money and is not doing anything illegal, why shall we bother? |
Posted By: tigershark
Date Posted: 27/Oct/2007 at 10:28pm
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whether yu post good results , bad results or no results at all if your stock has fii blessing then it will go up even 100 pe will be justified.no fii blessing stock will hibernate example nw18 ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: Vivek Sukhani
Date Posted: 27/Oct/2007 at 10:50pm
| God helps those those who help themselves....similarly FIIs helps those who earn themselves. there are exceptions to the rule as well, just as His Unroyal Lowness, vivek sukhani gets the blessing of Lord almighty without helping himself, similarly some leech stocks do get FII blessing as well without earning. |
Posted By: kannanravi1
Date Posted: 27/Oct/2007 at 2:36am
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Thanks Prosperity for the info.
Kannan ------------- kannan |
Posted By: prosperity
Date Posted: 28/Oct/2007 at 5:59pm
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e.g. Sharaab, Cigarrettes, Bidis, Paan Masala....??
-----------------------
Seriously this is a though one for me - I refrain from answering !
Debatable on the similiar grounds that one is a non-veg because he does not want animals to be killed for his stomach !
If you are putting your money in it - IT IS YOUR BUSINESS !!
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Posted By: prosperity
Date Posted: 28/Oct/2007 at 12:59pm
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http://www.tatasteel.com/newsroom/press380.asp - Rights and CCPS Issue Details from Tata Steel's Website
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Posted By: Vivek Sukhani
Date Posted: 28/Oct/2007 at 7:51am
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yaar, yehi mujhe ek dam pasand nahi hai, companies asking a penny from the shareholders. prosperity, does the scheme work out like this?
Suppose if I hold 100 tickets.
I will get 20 rights shares which can be subscribed at 300 p.s.
So I have to dole out 20*300=6000 rupees
Again I will be entitled for 90 CCPS
For which I have to shell out 90*100=9000 rupees.
Total outlay will be 15000 rupees for every 100 tickets of Tata Steel
Ex-rights price should be what?
Cost of 100 tickets @ 990 per ticket=99000 rupees
Cost of Right shares=300*20=6000 rupees
Cost Of CCPS=90*100=9000 rupees
Now, the total shareholding of a shareholder will change upon conversion.
For 100 tickets, he will get 100/10*9/6=15 tickets
So Ex-rights price based upon Friday's close @ 990 will be?
(99000+15000)/(100+20( right shares)+15( shares receivable upon conversion of preference shares))
=114000/135
=844.45
Now, i havenet discount the price of CCPS converted shares for its Time value. So, the precise calculation will take a little bit more effort
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Posted By: Vivek Sukhani
Date Posted: 28/Oct/2007 at 7:52am
| Prosperity, do comment if my calculations are alright. |
Posted By: prosperity
Date Posted: 28/Oct/2007 at 11:08am
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Perfect Calculations !
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Vivek Sukhani:
Now, i havenet discount the price of CCPS converted shares for its Time value. So, the precise calculation will take a little bit more effort
--------
If someone is a long term holder and does not want to sell out his shares - there is no need to discount shares for Time Value - Above Calculations are perfect for him !!
IT DOES NOT MATTER TO ME IF CCPS SHARES ARE TRANSFERRED TO ME TODAY OR AFTER 2 YEARS - INSTEAD OF GETTING DIVIDENDS, I'LL GET INTEREST ... (anyhow i dont care too much abt dividends - let company keep it - if it knows how to deploy the cash efficiently)
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Posted By: Vivek Sukhani
Date Posted: 28/Oct/2007 at 11:13am
| ya.... good observation. However, i want to get fat dividends. But, Tata steel has made a mockery of ex-rights price based on Friday's close....hahaha!!!!!! congrats to you......and all the shareholders of tata steel!!!!!!!!! |
Posted By: kannanravi1
Date Posted: 29/Oct/2007 at 1:18am
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Vivek,
Your calculations are spot on. But I was wondering why you do not like rights issues? Isn't this a good deal for existing investors? It is almost like a reward for long term patient investors (though i dislike dilution because of the rights). I myself have some tisco shares and am overjoyed at this opportunity. Or shouldn't I be? What are your thoughts?
Kannan ------------- kannan |
Posted By: India_Bull
Date Posted: 29/Oct/2007 at 1:28am
TISCO dropping by 100+ is a very good opportunity.. ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: Vivek Sukhani
Date Posted: 29/Oct/2007 at 9:10am
| hey kennan, I dont like companies which ask for cash. nothing big reason for dislike. Although, now i think these rights are more in the nature of a bonus. i have just 340 tickets but the way this stock has behaved, I am quite delighted. Although, I would like to back manish that its the resource companies which will make the killing but still the company is trying to assure itself of the resources. I actually wanted to play the steel game in a very diversified manner, i.e wanted a small holding in ore stocks, in coke stocks like NRE Coke, refractory bricks stocks like Vesuvius, metallurgical chemical cos. like foseco. industrial gas stock like BOC, electrode stock like Graphite and most importantly steel manufacturers like TISCO and SAIL. However, Vesuvius and BOC started to disappoint, and I had to abandon that idea. However, in the long run, I believed the idea wouldnt have too badly but some companies fail to raise the hands and deliver. Lets see, where do we go from here....... |
Posted By: prosperity
Date Posted: 30/Oct/2007 at 12:16pm
Agar Tata ne nikhar diya, toh Corus toh Heera hai 
And given Tata's skills of making lowest cost - They are going to acquire captive resources and make Corus - a dimond mine !
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Posted By: Vivek Sukhani
Date Posted: 30/Oct/2007 at 5:29pm
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lets see......whether corus becomes a hira or a hara. For me, its all financials and dividends. the moment I sniff something there I will make a move. I abandoned Hindalco when I saw that reduction in dividends and the only thing I will see now is how they service equity. |
Posted By: kannanravi1
Date Posted: 30/Oct/2007 at 9:52pm
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Vivek,
Great thought process. You were thinking of investing along the whole value chain of steel making. If you don't mind me asking, in what way have Vesuvius and BOC dissapointed you? Earnings? Financials? I haven't done much analysis on any of the other upstream companies. Foseco does seem like a great company to me from the financials. Haven't gone deeper into their competitive positioning and valuation. ------------- kannan |
Posted By: Vivek Sukhani
Date Posted: 30/Oct/2007 at 10:04pm
| earnings and financials, both. Vesuvius is still I can bet on but BOC has hugely disappointed. Foseco is a lovely company. But now its being taken over by Cookson plc which in turn is vesuvius' principal. I do have graphite and the management is on a perfect path. Let see where it goes and I again added 100 nominal tickets again in Graphite yesterday. I am expecting it for 100, lets see where it goes to from here...... |
Posted By: kulman
Date Posted: 30/Oct/2007 at 10:57pm
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Vivek bhai
Have you also had a look at Jamshedpur based TAYO ROLLS? TISCO owns stake in it & it supplies work rolls for rolling mills. Work Rolls need replacements due to wear.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: Vivek Sukhani
Date Posted: 30/Oct/2007 at 11:07pm
| I missed on that.......Tayo Rolls. I believe calcutta based company Gontermann Piepers is also this line. Tayo was in my list and I wanted to buy that but then somehow missed on this. this is one of the most favorite of one of my cousin dadaji, and I belive I asked some of my bummies to load this when it was nearly 150 levels but I myself stayed away from that as I was busy piling up other stocks. Some of my bummies do still hold tayo |
Posted By: prosperity
Date Posted: 04/Nov/2007 at 1:59am
| http://www.sebi.gov.in/dp/tatasteel.pdf - http://www.sebi.gov.in/dp/tatasteel.pdf ENJOY !! |
Posted By: equity analyst
Date Posted: 06/Nov/2007 at 7:31pm
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i have given delivery of tata steel on 6Th nov will i get the rights forms.pls answer any one.
------------- "Markets are the places where two types of people meet up in the morning: those with experience and those with money. Towards the end of the day, they exchange their assets and go home." |
Posted By: kg
Date Posted: 06/Nov/2007 at 11:00pm
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i too hvnt recd the rights form...has someone received it ? also can someone tell me what is to be done with the shares of essar steel ...i dint get the delisting form ? ------------- Lets rock |
Posted By: Vivek Sukhani
Date Posted: 07/Nov/2007 at 10:00pm
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Hi Krishna,
Yaar abhi abhi to ex hua hai.....aiasi bhi kya jaldi hai!!!!!!
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Posted By: kg
Date Posted: 07/Nov/2007 at 10:10pm
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who would want to not get money into account asap ------------- Lets rock |
Posted By: Vivek Sukhani
Date Posted: 07/Nov/2007 at 10:12pm
| well, mere bhai yahan paisa lagega, aayega kahan se?????? Ab yeh mat bolna ki aapko baichne ki hadbadi macch gayee hai..... |
Posted By: kg
Date Posted: 29/Nov/2007 at 12:40pm
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vivek ..i also got the form finally yday ...hvnt gone thru it ..but on the face of it could not understand the compulsorily convertibel preference shares funda...any idea ? last date mein abhi time hai ..7th dec ------------- Lets rock |
Posted By: kannanravi1
Date Posted: 29/Nov/2007 at 7:30pm
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I thought I might be able to add my 2 cents but I am sure Vivek can throw more light:
CCPS is a mechanism for Tisco to delay their equity dilution. For now they give us preference shares in the ratio of 9 CCPS for every 10 equity we hold (each CCPS costs Rs. 100). For two years they pay us around 2% dividend which is roughly equal to their dividend yield today on equity. Two years later, they will convert every 6 CCPS that we got into 1 equity. Any remaining CCPS that could not be converted (because of not being multiple of 6) will be consolidated into a common pool for all investors. This common pool of CCPS will be sold in open market (I believe they will sell one equity for every 6 CCPS in this common pool) and the proceeds will be divided among the shareholders. This is my rough understanding of CCPS.
But on the face of it, the equity option @300 seems more lucrative that the CCPS. Since, after two years 6 CCPS of Rs.100 each is converted to 1 equity. Thus essentially we are getting 1 equity @ Rs. 600 two years down the line. I would rather invest Rs.300 today for 1 equity than Rs.600 two years down the line. The present value of the equity from CCPS is Rs. 453 (@ 15% discount).
------------- kannan |
Posted By: gwhunting
Date Posted: 06/Jan/2008 at 3:52pm
| Tatas say that tata-corus turnover for next year will be 25 billion dollars.. so tisco will surely give good..no great returns to its holders.. |
Posted By: bjhawar
Date Posted: 07/Feb/2008 at 4:29pm
| Tata Steel co available at 7.6 P/E to 2008 earnings and if some one buys its Pref Shares fm mkt to be converted into equity giving an further arbitarge opportunity of nearly 100/- giving greater margin of safety, steel prices at new highs and further steel price hike on cards globally why it cant be a multibagger in next 3-4 yrs. co operating at 40+ opm |
Posted By: investor
Date Posted: 07/Feb/2008 at 4:35pm
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If the US economy goes into a severe slowdown, then that will impact global demand for steel, which will in turn bring down steel prices.
------------- The market is a place where people with money meet people with experience. The people with experience get the money while people with money get experience! |
Posted By: stocktin
Date Posted: 28/May/2008 at 3:45am
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I would rate Tata Steel as one better performing bluechips in these difficult times:
(a) It has now recovered to 94% of its yearly peak (Rs903/- Vs a max. Rs 957). (b) Being a centenary year, the company gave 20% shares at a price of Rs 300/- (c) Also a CCCP at a price of Rs 600/- is due in September, I think. Besides the Corus deal, they are aggressively bidding for the State owned Indonesian Krakatau Steel along with other bidders: http://steelguru.com/news/index/2008/05/28/NDc0NTk%3D/TATA_Steel_and_Essar_in_race_for_PT_Krakatau_Steel.html The price if purchased immediately post Corus (July-August?)could have yielded something like 100% by now, with more to follow. I have faith in the international steel market at present and see strong demand till at least 2012-2014. Indian Steel output is expected to touch 125MT by 2012. The strong international demand is the reason for sudden aggressive moves for takeover of steel plants by Mittal, Tata, Brazil companies and even Posco of Korea. Of all these Mittal is a visionary, as he started more than 10 years back. The keenness to buy steel plants and natural resources (ore, coke)is across geographical regions and irrespective of political and economic stability. Can you imagine: We were at 2.0MT in 1947, China was 0.5MT. Till the early 1990s, we stagnated at a very slow 7MT, but China progressed before leaping from <100MT in 2005 to >400MT now! These figures give an idea of the infrastructure development in China. China is the glutton who starves the world of resources creating a huge demand. You can worry about steel as a commodity once China starts slowing down. More modestly, India was at about 7MT in 1990, went to 38MT in 2005 and is expected to reach 125 MT in 2012 (more conservative estimates give >100MT in 2020). But I believe the former figures as we are getting big names interested and the private sector is growing fast. Today no one talks much of Bhilai, Rourkela, Durgapur, etc. But in some ways though production figures are lower, Indian steel should have the edge if Corus, Posco and Arcelor come in, because of technology inputs. Our steel industry should be more energy efficient and we have plenty of quality iron ore. China needs to import ore, mainly from India. What India lacks is good quality coke or coal used in the industry. Indian coal is poor quality and not suitable for steel manufacture. Hence we look for mines in places like Australia and Indonesia. ------------- taggy |
Posted By: stocktin
Date Posted: 29/May/2008 at 8:43pm
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Sorry for posting in the wrong thread. Can some one help to correct it? ------------- taggy |
Posted By: deveshkayal
Date Posted: 30/May/2008 at 8:36pm
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Rel MF has always been ahead of spotting the trend while launching sector specific funds. Rel Natural Resources Fund being the recent. Tata Steel is the second largest holding of the fund. Goldman Sachs in their latest report had the target price of around Rs.1150. Citi initiated coverage on the stock today with a target price of Rs.1286. Excerpts from the report: Target Rs1,286 - We initiate on Tata Steel (TSL) at Buy (1M). TSL is the world's sixth largest steel company with a global presence and has control over key raw materials in India. Corus, its 100% subsidiary, should be able to pass on most cost increases in CY08. Margins should benefit from synergies and cost cutting programmes over the next three years. Our SOTP target price is Rs1,286 (12M forward cons. P/E of 9x and EV/EBITDA of 6.5x).
Captive raw materials in India - TSL's Indian operations have high EBITDA margins (~40%) due to raw material security (100% iron ore, 70% coal) and efficient operations, which largely insulate TSL India from expected hikes in iron ore (85%+) and coking coal (200%). With domestic prices expected to rise in three months, TSL benefits more than other domestic non-integrated plays. Growth in India - By 2010, capacity in India will double to 10m tpa, taking its share to 30% from 18%. Another 23m tpa is planned over the next few years. Corus purchase vindicated; upside in cost savings and financial leverage - Our expectations for Corus suggest that the price paid is warranted. Although volume growth is limited, improved mix, cost savings and the financial leverage placed on the company should provide upside. Based on our conservative assumptions, financial leverage should yield 20% upside in three years. Raw materials should be the first port of call for significant cost savings. Risk factors - (1) Steel price weakness; (2) Delays in access to captive iron ore/coal; (3) Exchange rate changes; (4) Expansion delays. Yatin jee can keep us posted on this thread on the happenings in the steel industry. Yatin jee, what's your view on Jindal Steel & Power ? ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: stocktin
Date Posted: 30/May/2008 at 9:20pm
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Hi Devesh,
Call me just Yatin. Thanks for tranferring the post and all the useful information. My thought process got carried away from the word Bluechip when viewing Reliance Capital. I have not made a company specific survey but a generic one for global demand while investing Tata Steel. The Corus deal and a centenary year made me decide on that. I will revert after studying Jindal. ------------- taggy |
Posted By: stocktin
Date Posted: 30/May/2008 at 11:06pm
Thanks for the information, but can you tell me how you arrived the discounted value? Are the CCPs available for sale in the market? ------------- taggy |
Posted By: kannanravi1
Date Posted: 30/May/2008 at 11:26pm
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Hi Stocktin,
I don't specifically remember the calculations, but I think 15% was the discount I used to apply to calculate present value at that point in time. The CCPS is definitely available for trading. The CCPS is currently available at a slight discount to the equity price (you get the discount since you have to wait for the equities to materialize some time down the line). Please check with your broker as to how you can trade the CCPS. Personally I know that it is available to be traded in ICICI Direct. ------------- kannan |
Posted By: stocktin
Date Posted: 30/May/2008 at 11:51pm
Thanks ------------- taggy |
Posted By: stocktin
Date Posted: 30/May/2008 at 2:46am
"Global steel price hikes likely to extend into Q3 - MEPS report Forbes - NY,USA Corus, part of industrial giant Tata Steel, recently raised its base prices for quarterly strip steel contracts in continental Europe by a minimum of 130 ... <http://www.forbes.com/afxnewslimited/feeds/afx/2008/05/30/afx5063206.html>" Also see this link for global steel demand patterns particularly in BRIC countries: http://biz.thestar.com.my/news/story.asp?file=/2007/12/31/business/19876423&sec=business "Steel production has risen dramatically by 49% (2001-2006), with world demand projected to grow at a compounded annual rate of 4.9% (2007-2010). Raw materials costs, such as that of iron ore, have surged 100% since 2004 and coking coal is up by over 90%. This leads steel makers to try to lock up sources of raw materials through long-term contracts, supplier acquisition or partnerships. Analysts said globalisation was still in its infancy in the steel industry, with 85% of production still used in the region where it is produced. Of the top 40 steel companies, only eight have strong production capabilities across multiple regions. Consulting group Accenture estimates that by 2010, the five top companies in steel will control 30% of the market – each averaging 80 million tonnes a year. In 2000, the top five companies combined to control only 14% of the market. The International Iron and Steel Institute (IISI) forecasts another strong year for the steel industry in 2007, with apparent steel use rising to 1.19 billion tonnes from 1.12 billion tonnes in 2006. Latest projections for 2008 suggest a similar global growth rate to this year at 6.8%. The BRIC (Brazil, Russia, India and China) countries, which accounted for about 41% of global steel demand in 2006, will again be leading the growth with an expected increase of 12.8% for 2007 and 11.1% for 2008. Overall, 77% of world growth in 2007 and 71% in 2008 will take place in BRIC. Meanwhile, Fitch Ratings in its latest report on Steel Sector Outlook 2008 expects steel prices to increase further next year but tightness in the supply of major raw materials could squeeze profit margins of Asian and European steel producers, particularly those with no direct access to resources such as iron ore, coke, pig iron and scrap. The agency expects steel prices to rise, on the average, by US$30 to US$50 per tonne, or about half of what would be needed to counter increased costs and competition from global markets. Despite its views of compressed margins in 2008, Fitch said the rise in steel demand internationally was expected to be 6% to 7% per annum over the next 12 to 18 months. Excess production could weigh on pricing and further put pressure on raw material markets, Fitch said. The agency cautioned that regional variations in pricing and profitability would re-emerge, given high freight rates and protectionism. “The key themes for the global steel outlook next year would be BHP Billiton Ltd's proposed acquisition of Rio Tinto plc, China's move to tighten steel exports measures and the US economy,” it said. ------------- taggy |
Posted By: deveshkayal
Date Posted: 31/May/2008 at 12:00pm
|
Any comments on Govt. intervention in controlling steel prices. How it affects Tata Steel ?
Jindal Steel & Power also seems to be promising. This is what i found out from Business Today:
------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 31/May/2008 at 4:20pm
Is this the one where Sunil Singhania is sitting on a 100 bagger
 ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 01/Jun/2008 at 12:59pm
| Yes, this is the one. |
Posted By: experteye
Date Posted: 02/Jun/2008 at 1:26pm
|
If 2007 was the year of steel deals, then the new year is poised for some major transactions by steel companies in the raw material space. Last year saw some of the biggest deals in the steel sector, led by Tata Steel which acquired Corus for $12 billion.With the acquisitions and mega expansion plans in place, the companies are now gearing up to repeat the same in the iron ore and coking coal segments. ------------- more risk,more profit but have a vision before taking risk,itis all about investment in equities market. |
Posted By: stocktin
Date Posted: 02/Jun/2008 at 10:26pm
Tata steel (has mines for ore and coke), as they came before socialism with accompanying nationalisation of resources like ore and coke. So they had a distinct advantage. People like Posco and Jindal are probably leveraging these resources before they even start a project. This leverage is possible only before starting a project (example Posco in Orissa, the government and local people will pull the project in all directions after it starts). So I am not sure what deals the steel companies can work out once they commit to a project. Ore and coke are still firmly in government control. Unless you suggest they jointly try to buy mines outside India. But that would only be coke. India is in top3 for iron ore and probably has the best quality (Bhagwan ki Kripa). ------------- taggy |
Posted By: Mohan
Date Posted: 02/Jun/2008 at 5:34am
|
Bhagwan ke pehle to yeh santri aur mantri ka khayal rakhna padta hai bhaya
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: stocktin
Date Posted: 03/Jun/2008 at 9:05pm
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Aaap Tantri bhulen? ------------- taggy |
Posted By: deveshkayal
Date Posted: 09/Jun/2008 at 5:53pm
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Top holding of Rel Natural Resources Fund ! Most of the MF's are betting on this stock. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: Mohan
Date Posted: 09/Jun/2008 at 2:19am
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The big bear and company is bullish in this counter. No wonder this one bounces back the fastest. This one will zoom when sentiment improves. Most of the money will be made in this by the time it catches fancy. ------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: stocktin
Date Posted: 09/Jun/2008 at 2:24am
Yes it has shown remarkable resilience since January. In fact, about a month back it had reached 94% of its peak value. Not sure how it will do from here. ------------- taggy |
Posted By: Mohan
Date Posted: 09/Jun/2008 at 2:40am
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If this is its strenght in such a bad market. Imagine what will happen when the Bulls are charging
------------- Be fearful when others are greedy and be greedy when others are fearful. |
Posted By: experteye
Date Posted: 09/Jun/2008 at 9:51am
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I think at moment SAIL is best among steels. ------------- more risk,more profit but have a vision before taking risk,itis all about investment in equities market. |
Posted By: deveshkayal
Date Posted: 26/Jun/2008 at 9:47pm
|
Some big numbers..
Tata Steel's consolidated net profit stood at Rs 12,349.8 crore in FY08 as against Rs 4,165.6 crore. The company net sales came in at Rs 1,31,535.8 crore from Rs 25,213.31 crore YoY.
http://www.moneycontrol.com/mccode/news/searchresult.php?search_str=B%20Muthuraman&datesel=2 - B Muthuraman , Managing Director, http://indiaearnings.moneycontrol.com/sub_india/comp_results.php?sc_did=TIS - Tata Steel , said the steel major would hike return on invested capital to 30% by 2012. It would exceed target of USD 450 million in savings a year, he said.
The steel major's tube unit would supply tubular components to Nano, its MD said. "The company has undertaken several initiatives to procure raw materials.
The steel major plans to raise funds via structured equity in 18 months for greenfield projects, reports Newswire18.
Tata Steel said that it could go for some restructuring of its subsidiaries so that its mineral assets are all pooled into one company. It clearly said that they will unlock value. Later on, they also added that the move was to raise capital.
30% ROIC is excellent for a steel company, isn't it ? ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: stocktin
Date Posted: 26/Jun/2008 at 10:17pm
|
Devesh,
Thanks for the post. The 30% returns is indeed good. There are some political concerns regarding their Orrisa project. I am not sure what 'raw material' they want to procure for tubes for their Nano project. After all they produce steel? Unless the steel needs to be imported and they will only roll out the tubes. I hope this will not be another Nandigram... Tribals clash with VVJM activists at construction site JAJPUR, June 25: Construction of a boundary wall triggered violence yet again at the trouble torn Kalinga Nagar area today with Vistapan Virodhi Jan Manch ( VVJM) activists and armed tribals clashing with local land oustees. At least eight motorcycles were set ablaze and a few people sustained injuries in the clash and the construction work of the proposed Tata Steel project’s boundary wall was stalled. Jajpur district magistrate Dhiren Kumar Das, SP, D.S Kuttey rushed to the spot. Four platoon police force has been deployed to prevent further escalation of violence in the area. Trouble started this morning when some contractors and villagers who were reached the site. Tribals and people of Khadihatia and Gadhapur villages who are backed by the VVJM confronted the workers. A clash ensued and those who had undertaken the construction work fled for safety leaving behind their cycles and bikes. At least eight bikes were set ablaze by the protestors. The VVJM, the forum spreading the anti-displacement movement in the steel hub since 2 January, 2006, police firing in which 14 tribals were killed warned the administration and Tata Steel against any future mishap. Police sources said that some local villagers of Dasamania, Manoharpur, Jakhapura were awarded the construction work of the boundary wall of the proposed Tata steel project in Kalinga Nagar. Anticipating trouble from the VVJM, the steel company had handed over the boundary wall construction work to land losers. Meanwhile, the VVJM general secretary, Mr Rabindra Jarika reminded the administration and government of its assurance that work will not start until all demands of the affected people were fulfilled. n SNS ------------- taggy |
Posted By: gwhunting
Date Posted: 26/Jun/2008 at 10:58pm
| 30% on ROIC in any company is good.. Results were pretty good and I am impressed how they keep up with profits even after paying hefty interests.. Tata is really Tata.. |
Posted By: deveshkayal
Date Posted: 26/Jun/2008 at 11:49am
|
Tata Steel is now the second largest company in India (after RIL) by revenues and profits.
http://www.livemint.com/2008/06/26204059/Corus-hurts-Tata-Steel-again.html?atype=tp - Corus hurts Tata Steel, again ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: tigershark
Date Posted: 27/Jun/2008 at 2:35pm
|
if any one wants to buy this one look at tata steel ccp ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: stocktin
Date Posted: 27/Jun/2008 at 8:19pm
Hi Tigershark, Can you tell me how one buys from tata steel ccp? Someone earlier in this forum suggested we get it at a discount? Any idea what the discount is like? ------------- taggy |
Posted By: paragdesai
Date Posted: 27/Jun/2008 at 9:08pm
This is BSE CODE for TATA STEEL CCP.
|
Posted By: stocktin
Date Posted: 27/Jun/2008 at 9:40pm
Thanks ------------- taggy |
Posted By: stocktin
Date Posted: 27/Jun/2008 at 10:07pm
I could not reconcile with the figures given in this article: (1)If Corus accounts for 72.5% off Tata Steel's revenues, how come Tata Steel will grow by 30% this year. (2) If Corus is 88% of Tata Steel's overseas subsidiaries, I am curious how the quarterly results were compared with previous year quarters. At 88% the entire overseas operation changed. (3) I have doubts about Chinese dumping the European markets. As the Chinese (like Indians) produce the general quality steels in large volumes, unlike Corus or Arcelor which also produce speciality steels. This is also one of the the major reason for Tata acquisition. Probably what has hurt them is low local demand (Europe) for steel & non-competitiveness in international market for general steel. (4) If you see world demand it is in the 10-12% range overall. But for BRIC: 41% in 2005, 77% 2007 and estimated 71% in 2008 (before oil crisis). So all demand for steel is from these countries. Why would China be intersted in selling large quantities to Europe without first fulfilling their own needs? (5) Chinese production from 100MT in 2005 to 400MT in 2007 and all for domestic consumption - that is the level of infrastructure demand in China. Their problem is, there is shortage of ore for their own needs. ------------- taggy |
Posted By: tigershark
Date Posted: 27/Jun/2008 at 10:10pm
|
wonder what will happen to stock price if globally steel prices come down later this yr or in early 09 ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: basant
Date Posted: 27/Jun/2008 at 10:17pm
|
It will follow the commodity but it is strange to see commodity companies giving a guidance. That means they have assumed the price of steel 3 years from now!!!. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: master
Date Posted: 28/Jun/2008 at 11:22pm
|
Key highlights from Emkay’s report on Tata steel 30% of the deliveries of Corus are to the automotive sector where price hike of E230/t has been achieved. However, the price hike is enough to meet its cost push of €230/t. hence we do not expect incremental margins from this segment. -Corus has a 4mtpa Teesside facility which sales slabs on cost basis. We do not expect this facility to contribute anything on the EBITDA as well. - The balance 12mt deliveries are based on spot market where the pricing has been robust. World Steel Dynamics reports that spot HR prices in increased by almost USD470/t from Jan 1, 2008 onwards with matching increase in plates. We believe the spot market will remain robust on account of lesser exports from - In consolidated income statement, other expenses include a charge USD100mn on account of change in pension assumptions for charge of USD100mn on account of loss in steel derivatives. Outlook and valuation -Given the fact that almost 50% of the capacity of Corus is unlikely to make significant contribution to its EBITDA, implying that the balance 50% capacity which is sold on spot will have to make up for the deficit. The underlying assumption is that the steel cycle has to remain extremely robust to support the pricing. We believe Tata Steel is now more leveraged to steel cycle in Corus and has 50% of sales pricing on spot, 30% of sales with pricing on quarterly basis. -Further, the company expects a synergy of over USD450mn with 50% coming from manufacturing which we have partly factored (USD150mn tax charge loan taken on Corus’ balance sheet) the synergies in our numbers. -At CMP, the stock is trading at 7x FY08 FDEPS of Rs108.3 and EV/ EBITDA of 5.8x FY09 estimates. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: master
Date Posted: 24/Aug/2008 at 12:02pm
|
http://www.thehindubusinessline.com/iw/2008/08/24/stories/2008082450581100.htm - on Tata steel ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: basant
Date Posted: 12/Sep/2008 at 11:02am
|
Can someone indicate the following for Tata steel:
Book Value for Fy08
EPS for Fy09
Debt levels consolidated.
ALso if someone has a report please email it to me.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: nav_1996
Date Posted: 13/Sep/2008 at 12:33pm
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If steel prices don't go down, this stock can double from these levels.
This 100 years old company is asset rich. I remember in early 2000 when its stock where down, its mkt cap was lower than real estate it held. |
Posted By: basant
Date Posted: 13/Sep/2008 at 12:40pm
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It is still Rs 40,000 crores with loads of debt but it can become a good bet depending on where the price goes. The debt can be repaid quickly also so there is an opportunity but timing is very crucial in a commodity stock.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: valueman
Date Posted: 13/Sep/2008 at 2:54pm
|
Saw this interesting piece on Tata Steel in the link given below : http://e-investing.in/showthread.php?t=1775 Firstly, this is a commodity stock. Steel prices depend on global demand-supply. If the world economy goes into a recession, steel price will soften too. In Q1, the company's standalone sales were Rs 6165 crore and consolidated sales were Rs 43508 crore. Only 14.16% of the consolidated sales were from the Indian unit. If one looks at the net profit, Rs 1488 crore was the standalone profit figure and Rs 3900 crore was the consolidated net profit (after minority interest). Doesn't it seem strange? 6165 crore of sales brought 1488 crore of profit. 43508 crore of sales brought 3900 crore of profit. What does this suggest? This clearly shows how inefficient Tata Steel's overseas operations of are. One primary reason for this is that Corus doesn't have its own captive raw materials (iron ore and coal). A severe recession will not only kill the margins of Corus, it can even turn Corus into a loss making venture. Just two days back, Ratan Tata warned workers of Corus of "hard times ahead". ======================================== The story doesn't end there. Tata Steel's balance sheet has taken a hit of Rs 5352 crore in this quarter because of MTM losses in its pension fund portfolio. If these losses had been routed through the profit and loss account, Tata Steel would have reported a loss of over Rs 1400 crore. In UK, it is an accepted accounting practice to report such losses in the balance sheet. (In India AS15 requires such losses to be reported in the P&L account). The value of the pension fund portfolio may go up again in the next quarter. As such losses/profits can lead to sharp fluctuations in the P&L account, these entries are adjusted against "Reserves and Surplus" in UK. Anyway, a loss is a loss. "Pension funds" are a liability for the company. No matter how big the losses are for a company, liabilities remain constant. Current value of Tata Steel UK's pension fund portfolio is around Rs 120000 crore. I am not sure where exactly these funds are invested, but if the financial markets in UK deteriorate further, Corus (Tata Steel UK) may see more losses in the coming quarters. This is what is worrying investors and keeping them away from the stock. I don't have any data about pension and other liabilities of Tata Steel UK and thus won't be able to comment on fundamentals of Tata Steel or Tata Steel UK. Technically, if one wants to invest in this stock, then I suggest averaging out at Rs 500 and Rs 400. (Rs 400 is a very strong support for the stock). ------------- To achieve satisfactory investment results is easier than most people realize ; to achieve superior results is harder than it looks . Benjamin Graham. |
Posted By: basant
Date Posted: 13/Sep/2008 at 3:18pm
|
Clears everything - almost. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: master
Date Posted: 13/Sep/2008 at 3:39pm
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RIL & Infy are falling. SBI & ICICI are already down. Tata steel is appearing nervous for Corus reasons. BHEL (analysed on a different thread) may have significant downside.
With so many heavyweights looking weak, is Dr Dooms going to be proved right this time around? Get ready for loading. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: valueman
Date Posted: 13/Sep/2008 at 4:58pm
Last week in a local TV Channel in Chennai a famous astrologer who bases his prediction on his ESP Predictions told that the stock market will crash again ( he already told that in December 07 end and we witnessed the Jan correction ) and also told that the coastal areas of Tamil Nadu and Mumbai will witness severe natural calamities due to heavy rain / earth quake /tsunami like situation .So he predicted a very gloomy situation only . But whatever it may be as investors we must welcome major crashes to load on to those good stocks which has a great potential to deliver in the coming years . ------------- To achieve satisfactory investment results is easier than most people realize ; to achieve superior results is harder than it looks . Benjamin Graham. |
Posted By: basant
Date Posted: 13/Sep/2008 at 5:13pm
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My inference: I'd rather be in the markets then in the coastal areas of Tamil Nadu and Mumbai!
Any idea when such a calaimity is due to hit Hong Kong. An overhyped self styled market guru stays there?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: rapidriser
Date Posted: 13/Sep/2008 at 6:13pm
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http://www.steelonthenet.com/commodity_prices.html - Steel Raw Material Prices have been increasing for the last 3 years. The steel prices have to remain at high levels for Tata-Corus to remain profitable. The next few months will be chllenging for all commodity companies.
|
Posted By: gwhunting
Date Posted: 13/Sep/2008 at 7:05pm
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@Basantji: Tata steel's consolidated debt is around 53K crores.. (source:Annual report)They paid around 4100 crores in interest last year (which isnt that big I suppose)
Fixed Assets are around 40 K crores.. |
Posted By: Vivek Sukhani
Date Posted: 13/Sep/2008 at 9:15pm
|
Well, there are far too many if-s which can be comfortably answered to make out a case for or against Tata Steel.
Firstly, we are all seeing a drop in the spot steel, but companies contract for long term as well. Also, they contract for both the long term as well as short term on the raw material side. Now, if a steel company is hedged on raw material front and 'open' on finished product side, its gone for next 2 quarters. Similarly, if its 'open' on raw material side and firmed on supply side, expect a very wonderful quarter.
Secondly, even though steel is a commodity, but do remember its a very critical component from industrial growth on which both manufacturing and service sector growth hinges. If steel goes for a tail-spin, many a things will happen.
Thirdly, value-added steel will not fall like a stone from Seventh Heavens. So, that needs to be watched as well. Ingots and Billets are on one part. Colled Rolled Steel and Coils are very different. So, just as when prices were rising, we are scouting for companies with backward linkages, similarly when prices are falling, we need to identify forward linkages, a thing thats quite difficult to fathom.
Now, thats for the Sector but when it comes to stocks, i think Steel companies in India have to go through a phase of consolidation. There are far too many players, and most of them will go bust in the downward spiral. this is how a typical cycle works out.....in a few quarters from here, we may start seeing buy-outs happening, some mills going back on starting a mill, production cuts, closures etc. And that is when steel companies shall become good buys, not now.
The thing is, sentiment is totally rotten at the moment. So, prices may firm up but confidence will not. And steel is not the only industry getting plagued by that, perhaps all the metals are facing the heat. Inspite of such tall value enhancing steps announced by vedanata group, see where has Sterlite gone. Mr. Tulsian made such a case for Malco, and see what happened since he spoke so good about MALCO at such length.
People may curse commodities in general but all one needs to understand is they fetch sharp returns, on both sides, depending upon when they invest. Is anyone observing how tea is behaving in this market, thats a commodity for all practical reason. When Gujarat NRE coke announced its bonus, its price was about 6 rupees a share. And my dad made a return of about 45000+ from a fluke investment( he had to take those shares forcibly) of just 320 rupees, in less than 3 years. And he is still saddled with a few tickets. Although, the amount is paltry in current context, yet people have to feel the pulse and then invest. Just as there are no holy cows, there are no untouchables either.....
I must disclose my interest in tata steel. I do have a reasonable position in tata steel, both directly through common stock as well a indirectly through CCPS. Although, I downsized my family's position quite significantly by selling it in the 800-900 range, yet am still holding some quantity.
What surprises me, is that when i was selling people were so excited about it. Such a turnaround in sentiment in sentiment in such a small span of time, just goes on to show the lack of faith which market participants display in their behaviour.......
------------- Jai Guru!!! |
Posted By: kumardiwesh
Date Posted: 15/Sep/2008 at 11:40pm
|
http://www.etintelligence.com/etig/researchchannels/investorsspecial/investorSpecialCurrent.jsp?#undefined - http://www.etintelligence.com/etig/researchchannels/investorsspecial/investorSpecialCurrent.jsp?#undefined ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: shivkumar
Date Posted: 15/Sep/2008 at 11:44pm
| Tata Steel promises to surprise on the upside. |
Posted By: kumardiwesh
Date Posted: 15/Sep/2008 at 12:32pm
|
Yeah...I don't understand steel at all (not that I understand other sectors).
What I want to know is whether only Tata Steel will do well or is it boom time for steel in general? ------------- "History does not tell you the probability of future financial things happening" - Warren Buffett |
Posted By: shivkumar
Date Posted: 15/Sep/2008 at 12:44pm
|
Actually, the steel commodity cycle seems to be at an end with recession looming in the US and Europe. That's why Tata Steel is getting hammered so mercilessly in the market on the assumption that Corus will drag down the company. But I am betting on the Tatas ring-fencing Tata Steel from the vagaries of Corus. Steel demand is robust in India. The company has 100 per cent raw material security in iron ore and 80 per cent raw material security in coal. Though this would change intially with new capacities coming up in Jamshedpur, there are indications that Tata Steel will bag more mines in Jharkhand to feed the new capacities. At the AGM Ratan Tata pointed out that raw material - ie iron ore and coal is concentrated in the hands of three companies in the world and all steel producers are at their mercy. But, he said, the company aims for 50 per cent raw material security in three years' time on a consolidated basis. The Tatas are already planning to spin off international operations like Corus, NatSteel, etc into a separate subsidiary for raising funds to expanding raw material security. Though this news was denied by company management, it has been in the cards ever since Corus was acquired. One also expects Tata Steel to benefit from the high technology from Corus. I think much of the negatives have been discounted by the sharp fall in Tata Steel price. But that does not mean the company will not get more attractive in the face of sustained bear hammering in global markets. |
Posted By: master
Date Posted: 15/Sep/2008 at 9:00am
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Q1 results indicate 86% of the sales come from overseas operations, so basically they need to get this corus integration right. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: basant
Date Posted: 15/Sep/2008 at 9:12am
|
This is really high. It means that like Infy tata steel is also a global company which is listed in india and its affairs would be regulated by what happens across the world then in India in particular. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: master
Date Posted: 15/Sep/2008 at 10:00am
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And now we've to keep track of india holdings of us banks fearing fire sale & hammering before taking call on entry points.
Goldman has a sizable holding in tata steel. ------------- Someone’s sitting in shade today because someone planted a tree long time ago. |
Posted By: tigershark
Date Posted: 16/Sep/2008 at 4:23pm
|
r we seeing the begining of a process where indian shares r finally moving into the hands of the rightfull owner?i dont know what do you guys think ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: nannu_68
Date Posted: 16/Sep/2008 at 8:21pm
 ------------- nannu |
Posted By: Vivek Sukhani
Date Posted: 16/Sep/2008 at 10:24am
hahaha.....
The problem is the new 'rightful' owners are not willing to pay as high the price as the old 'rightful' owners have already paid for it. And thats the bone of contention. the transfer process from 'non-right' owners to new 'rightful' owners is taking place at a price which is bringing havoc to the old 'rightful' owners.
Note: By rightful owners, I mean Indian Retail investors, India-domiciled Mutual funds, Indian Insurance Companies, Indian Corporates, Indian HNIs. ------------- Jai Guru!!! |