Query Trends : Visa Steels

Query : I want to purchase the Visa Steels how is the short term future of the scrip? Pankaj

Thebullishtrends: Visa Steels share price closed on Friday at Rs.50. Visa Steels has entered into a JV with China's Baosteel to set up 1 lakh tpa ferro chrome plant in Orissa. The company plans to invest Rs 600 crore on capex to transform into an integrated steel player. The company is also planning to set up a 75-mw captive power plant to meet its electricity requirement..In the first half, it had a bit of bad luck with the blast furnace. Therefore Visa Steels trading turnover was about 53% as compared to 47% of manufacturing. By the end of the year, it expects to do 55% or more for manufacturing and 45% or less for trading.

Visa Steels has already commissioned ferrochrome plant of 50,000 tonne. In terms of prices, ferrochrome have been doing very well in both the domestic and international markets. It hopes to get some decent revenue and bottomline from the ferrochrome plant. But the Coke prices in international market is all time high it reflects operating profit margins of the company.

Singapore based Credit Suisse has recently bought 5.6 lakh shares of Visa Steels in open market at Rs.50 per share and acquired 0.5% holding of this share. Now the scrip is in (trade to trade) "T" Group and it would be traded and settled on Trade to Trade basis effective from December 14, 2007 and would attract a circuit filter of 5% or lower as applicable. Hence chances of immediate rise in share price may not be possible. But Visa Steels long term prospects are good. If you are already having these shares then we advised to hold it.