The counter on the Bombay Stock Exchange saw hectic buying activity as volumes zoomed from 6.84 lakh shares on November 24 to 33.37 lakh on November 24. In the following trading session, volumes further shot up to 38.45 lakh shares.

Tata Steel is believed to have in talks with a global steel major for setting up a joint venture for manufacturing hot-rolled coils (HRC). The joint venture is expected to be set up in North America. Market is cheering the reported move for setting a joint venture abroad as the company will be able to penetrate the global market in a better way, especially when the domestic steel industry has been going through a bad patch. Tata Steel had earlier plans to set up a 10 million tonnes integrated steel plant in Gopalpur (the firstphase of the project was at a cost of Rs 7,000 crore). However, the company had shelved the plan later on.

Tata Steel has been increasingly focussing on cost-cutting. For the first six months of the current fiscal, the company recorded a sales turnover of Rs 3134.79 crore. Operating profit was Rs 549.59 crore and interest burden stood at Rs 173.88 crore. Net profit was Rs 90.18 crore.

Tata Steel has been hit by the recession in the Indian economy. For fiscal 1999, the company recorded a 2.4 per cent fall in sales from Rs 6433.49 crore in 1997-98 to Rs 6274.64 crore in 1998-99. However, despite the fall in sales, its cost cutting measures helped the company report a 3.38 per cent increase in operating profit from Rs 966.24 crore to Rs 998.97 crore.

Thanks to a jump in interest cost, from Rs 259.68 crore to Rs 301.56 crore, the company recorded a 12.3 per cent fall in net profit from Rs 322 crore in 1998 to Rs 282.23 crore in 1999.

On an equity base of Rs 367.97 crore, annualised earning per shareworks out to Rs 4.9. The stock is currently quoted at a price-earning multiple of 31.27.

RIL, IPCL dip on polymer price cut
The reduction in prices of polymers by Reliance has dampened the sentiment at the counter. The petrochemical heavyweight has reduced the price of polymer for the second time in a month. The price of Reliance on the Bombay Stock Exchange has fallen by nearly 15 per cent from a high of Rs 269 on October 21 to Rs 229 on November 25. The other polymer manufacturer, IPCL, is also believed to have reduced the prices. The IPCL scrip on the Bombay Stock Exchange has lost 18 per cent from Rs 139 on October 20 to Rs 114 on November 25.

The price of polypropylene has been cut by Reliance from Rs 45.2 per kg to Rs 41.2, a reduction of 8.85 per cent. The price of polyehtylene has also been reduced by Rs 2 or 4.2 per cent to Rs 45.6 from Rs 47.6.

While several other cyclicals from petroleum and steel sectors have movedup, the news of price reduction by Reliance and IPCL has failed toignite a rally in these counters.

``The Reliance stock looks attractive at current levels after it has fallen from a high of Rs 268.

The current fall is just a blip and the price is likely to recover since polymer prices are expected to be high in the medium term,'' says a market participant.