Bhushan Steel rose 4.19% to Rs 779 at 11:59 IST after net profit surged 29.5% to Rs 171.87 crore on a 1.1% decline in sales to Rs 1304.70 crore in Q1 June 2009 over Q1 June 2008.
The result was announced during trading hours yesterday, 30 July 2009, when the stock had ended 4.64% higher at Rs 747.70.
Meanwhile, the BSE Sensex was 316.51 points, or 2.06%, to 15704.47.
On BSE, 1.39 lakh shares were traded in the counter as against an average daily volume of 2.78 lakh shares in the past one quarter.
The stock hit a high of Rs 803.70 and a low of Rs 760 so far during the day. The stock had hit a 52-week high of Rs 974 on 1 August 2008 and a 52-week low of Rs 260.05 on 9 January 2009.
The stock had outperformed the market over the past one month till 30 July 2009, rising 13.80% as compared to the Sensex's 6.17% rise. It had also outperformed the market in the past one quarter, soaring 79.95% as against the Sensex rise of 34.94%.
The mid-cap steel maker has an equity capital of Rs 42.47 crore. Face value per share is Rs 10.
The current price of Rs 779 discounts the company's Q1 June 2009 annualised EPS of Rs 161.87, by a PE multiple of 4.81.
The decent rise in net profit was backed by a steep drop in raw material prices. Bhushan Steel director (finance) Nitin Johari was quoted by the media as saying the company managed to book hot rolled coils (HRCs), a key input in cold-rolled steel making, before prices started firming up. It helped the firm in controlling input costs.
The price of HRC have dropped almost 40% in the last one year. He said the demand for steel is growing across sectors and going forward, the company may look at increasing prices marginally.
Bhushan Steel is a mid-sized secondary steel producer, which makes products largely for automobile and consumer durable sectors. It witnessed 33% rise in production in Q1 June 2009 over Q1 June 2008
Delhi-based Bhushan Steel has also increased the production capacity of its integrated steel plant based in Orissa five times to 2.5 million tonnes. The plant, which mainly produces HRC, will operate at the enhanced capacity from December onwards this year.
The firm is reportedly eyeing around 15% growth in revenues to reach Rs 6,000 crore this fiscal as against Rs 5,400 crore in 2008-09.
Bhushan Steel makes cold rolled, galvanized and special steel and strips. It also produces angles and wire rods. The company's plants are located in Uttar Pradesh, Maharashtra and Orissa.
