Visa Steel Ltd (BSE Code: 532721, CMP: Rs.28.20)

Indian steel demand to grow at 6-7% in FY10: Tata Steel

B Muthuraman, Managing Director of Tata Steel said, in an interview to a private news channel that Steel prices have bottomed out. He also said, that last quarter of 2008 saw the largest fall. He further stated that steel prices were not likely to fall further since they had already touched the bottom.

VISA Steel, a part of the Rs. 4,000 Crore VISA Group, is currently a producer of Pig Iron, LAM Coke, Ferro Chrome, Sponge Iron and Power and is setting up a Special and Stainless Steel Plant at Kalinganagar Industrial Complex in Orissa. The VISA Group has business interests in Steel, Power, International Trading, Shipping and Logistics.

For Q3FY09, VISA Steel registered revenues of Rs.163.12 Crores. However, there has been a fall in EBIDTA to a loss of Rs. 4.38 Crores and a drop in PBT to a loss of Rs. 22.35 Crores. The net loss after taxes during Q3 of FY’08- 09 was Rs. 24.75 Crores. VISA Steel’s financial performance during the third quarter of FY’2008-09 has been adversely affected due to the global financial crisis resulting in slowdown in demand and sharp correction in prices of iron and steel products such as Pig Iron, Coke, Ferro Chrome and Sponge Iron without corresponding drop in prices of raw materials such as Iron Ore, Chrome Ore and Coking Coal. The volatility in exchange rates have also resulted in a forex loss of Rs. 24.75 Crores.”

However:

(a) during Q3 of FY’08-09, the LAM Coke production increased to 88,631 MT compared to 50,638 MT during the corresponding period in the previous year.

(b) The Hot Metal production was reduced to 22,235 MT in Q3 of FY’08-09 versus 27,594 MT during the same period last year due to reduced offtake of Pig Iron.

(c) The Ferro Chrome production during Q3 of FY’08-09 was 1,220 MT compared to 7,769 MT during the corresponding period in the previous year as the Plant was mostly under shutdown due to poor market conditions and high cost of Chrome Ore. The Sponge Iron production during the quarter was 12,306 MT.