Production cut at UK unit hits Tata Steel

Tata Steel lost 6.38% to Rs 252.55 at 14:50 IST on BSE after its UK unit Corus decided to cut production.

The company made this announcement after trading hours on Thursday, 16 October 2008.

Meanwhile, the BSE Sensex was down 466.66 points, or 4.41%, to 10,114.83.

On BSE, 20.23 lakh shares were traded in the counter. The stock had an average daily volume of 17.86 lakh shares in the past one quarter.

The stock hit a 52-week low of Rs 250 in intra-day trade. It hit a high of Rs 279.40 so far during the day. The stock has a 52-week high of Rs 969.80 on 29 October 2007.

The mid-cap stock had underperformed the market over the past one month till 16 October 2008, declining 44.67% as compared to the Sensex's decline of 21.73%. It had also underperformed the market in the past one quarter, sliding 56.89% as compared to the Sensex's decline of 15.86%.

The company's current equity is Rs 730.58 crore. Face value per share is Rs 10.

The current price of Rs 252.55 discounts the company's Q1 June 2008 annualized EPS of Rs 81.47, by a PE multiple of 3.09.

Corus has decided to cut crude steel production by up to 20% or 1 million tonnes over the next three months, to lessen the impact of slump in steel demand amid the global economic meltdown.

Corus is Europe's second largest steel producer with annual revenues of more than 12 billion pounds sterling and annual production of about 20 million tonnes.

Tata Steel's net profit rose 21.8% to Rs 1,488.40 crore on 46.9% rise in sales to Rs 6,165.03 crore in Q1 June 2008 over Q1 June 2007.

Tata Steel is an integrated steel producer, which manufactures a variety of steel products. The company's products include steel ball bearing rings, alloy steel bearing rings, annular forgings, flanges, bearings, welded steel tubes, cold rolled strips and seamless tubes. Tata Steel also manufactures metallurgical machinery