Tisco ruled firm today after witnessing profit-taking in the last few sessions.

The scrip of the Tata Group steel major was up by 1.5% at Rs 161.65 on the BSE. It rose by as much as 2.2% to hit a high of Rs 162.75 earlier in the session. By 13:03 IST, the scrip had  registered a huge volume of 11 lakh shares.

The Tata Iron and Steel Company (Tisco) stock has firmed up once again after it witnessed a brief spell of profit-taking despite announcing buoyant Q4 and FY 2003 results. From Rs 155.50 on 3 June 2003, the scrip has gained 4.1% in the last three  sessions to the current Rs 161.95. Earlier, it rallied from a low of Rs 127.75 on 24 April 2003.

Tisco has announced upbeat Q4 results. Analysts remain bullish on the stock due to its attractive valuation.

`The company's business model is shaping up is very nicely, and it is de-risking itself by adopting a three pronged strategy of backward integration, moving up the value chain, and increased focus on exports. We believe the company is available at bargain valuations, and offers attractive gains to the investor," domestic brokerage Kisan Ratilal Choksey  Securities has said in a post-results update on the stock.

For Q4, Tisco recorded a massive 283% rise in net profit to Rs 469.08 crore (Rs 122.47 crore) on a 39.5% increase in net sales to Rs 2,664.76 crore (Rs 1,911.48 crore). The Q4 net profit as well as net sales beat projections made by a capitalmarket.com poll - a rise of 177% to 252% in net profit to Rs 339.5-431 crore and net sales of Rs 2,459 crore-2,555.3 crore.

For FY 2002-03, Tisco recorded a 394% rise in net profit to Rs 1,012.31 crore (Rs 204.90 crore) on a 29.3% increase in total income to Rs 8,771.71 crore (Rs 6,783.12 crore). On a consolidated basis, the group posted a huge 428% increase in net profit to Rs 1,021.77 crore (Rs 193.57 crore) on a 22.3% rise in total income to Rs 9,183.74 crore (Rs 7,511.36 crore).

Increase in sales realisations due to firm product prices and a higher share of value added products boosted Q4 results. A surge in exports also aided the strong growth. Tisco reported an impressive 144% growth in exports to Rs 422.15 crore in the quarter ended 31 March 2003. As a result, the share of exports (in sales, net of excise duties) jumped to 15.8% in the quarter from 9% in the previous corresponding quarter. Exports in US$ jumped by 152% to US$ 88.73 million.
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Tisco has been engaged in mining of iron ore, sourcing its ore from captive mines in Jojobera. Now the company plans to start iron ore mining as a commercial activity. This would not only add to the revenues of the company, but  could also help in reducing its own raw material costs, analysts feel.

This would boost the company's growth, and also make it a fully integrated player having presence in activities starting right from mining to galvanizing. "From next year, there would be no charge on account of ESS expenses, and thus the earnings would increase commensurately," KRC said in its report.

The bullishness on the Tisco counter stems from expectations of a recovery in domestic steel demand. The Centre's thrust on infrastructure in the Union Budget for 2003-04 has played a major part in boosting these expectations. Principally, investments will be made in railways, airports and sea ports through an innovative funding mechanism.