Tata Steel slides as ArcelorMittal's Q3 results fall short of expectations

Tata Steel slides as ArcelorMittal's Q3 results fall short of expectations

Meanwhile, the BSE Sensex was down 200.95 points, or 1.89%, to 10426.75.

On BSE, 24.46 lakh shares were traded in the counter. The scrip had an average daily volume of 20.98 lakh shares in the past one quarter.

The stock hit a high of Rs 249.80 and a low of Rs 218.60 so far during the day. The stock had a 52-week high of Rs 952 on 1 January 2008 and a 52-week low of Rs 150 on 27 October 2008.

The stock had underperformed the market over the past one month till 4 November 2008, declining 39.09% as compared to the Sensex's decline of 15.13%. It had also underperformed the market in the past one quarter, falling 65.33% as compared to the Sensex's decline of 27.07%.

Tata Steel, the world's sixth largest steel maker has an equity capital of Rs 730.58 crore. Face value per share is Rs 10.

The current price of Rs 219.90 discounts its Q2 September 2008 annualised EPS of Rs 97.86, by a PE multiple of 2.24.

ArcelorMittal, the world's largest steelmaker, reported third-quarter net profit below expectations today and forecast significantly lower earnings in the fourth quarter. The company also announced a series of measures, including more temporary production cuts and a pause in its growth strategy, in response to the economic slowdown.

ArcelorMittal reported a 29% growth in net income at $3.8 billion on a 38% increase in sales to $35.2 billion in Q3 September 2008 over Q3 September 2007.

ArcelorMittal's lower-than-expected earnings reflects the slowdown in the sector. Steel prices have come under pressure as the global economy has slowed, prompting the steel makers across the world to scale back production.

Recently, Moody's Investors Service lowered outlook on corporate family rating of Tata Steel to negative from stable. The change in outlook reflects the more challenging operating conditions now facing Tata Steel UK (formerly Corus) as a result of the likely deterioration in demand in Europe and the UK in the next 18 months, with declining steel prices and reduced production volumes, Moody's had said.

Tata Steel UK is the 100% subsidiary of Tata Steel, and is the holding company for the European steel operations principally consisting of the Corus group.

Tata Steel's net profit rose 50.1% to Rs 1787.81 crore on a 43.1% rise in sales to Rs 6850.67 crore in Q2 September 2008 over Q2 September 2008.

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.