The Hindu Business Line : Nava Bharat Ferro gains on industry revival

The bottomline
Expectation of better price realisation for ferro alloy sector on higher steel offtake
Co confident of better performance in Q4

Hyderabad , March 7

With the revival in carbon steel and stainless steel sectors of late, the markets are expecting better fortunes for ferro alloys industry soon.

As a result of an improved off take from steel industry, players in ferro alloys sector expect better price realisation. Apart from this, ferro alloys industry players are also experiencing a significant fall in raw material prices, which could result in better margins.

This has started reflecting on the stocks of ferro alloys on both the BSE and the NSE with substantial spurt in both volumes and value in the last few days.

The stock of Nava Bharat Ferro Alloys Ltd (NBFAL), the Hyderabad-based diversified entity with major focus on ferro alloys, has witnessed over 10 per cent jump in value during the last couple of days on the bourses.

On Monday, while the Sensex jumped by around 140 points, the NBFAL stock reported an increase of around 12 per cent on both the BSE and the NSE to close at over Rs 50. While over three lakh shares changed hands on the BSE, close to seven lakh shares were traded on the NSE. Despite the Sensex suffering a fall on Tuesday, the stock continued its rally both in value and volumes. It gained around eight per cent to close at Rs 54 on the BSE and the NSE. Volumes have also improved substantially. While over 5.38 lakh shares were traded on the BSE, more than 10.76 lakh shares changed hands on the NSE.

"There has been an increased activity in the ferro alloys stocks in the recent past. Of course, ever since we witnessed pressure on selling prices and increase in input costs in our ferro alloys business, we switched over to power trading in a bid to address pressure on bottomline. We do not expect our ferro alloys business to turnaround in the current quarter as a result of better fortunes of steel industry.

"However, we are confident of reporting better performance in Q4 compared to Q3 thanks to power trading. We expect the steel industry revival to help our ferro alloys business from next quarter onwards," the NBFAL Finance Director, Mr G.R.K. Prasad, told Business Line.