Tata Sponge hits new high on heavy volumes

Since January 17, the stock has rallied 45% after reporting a strong operational performance in Q3FY14.

Tata Sponge Iron has rallied 13% to Rs 424, extending its previous day’s 5% gain, on back of heavy trading volumes on the bourses.

The stock opened at Rs 378 and touched a record high of Rs 432 on the NSE. A combined 2.55 million shares representing 16.6% of total equity of the company changed hands on the counter till 1245 hours against an average sub 100,000 shares that were traded daily in past two weeks on the BSE and NSE.

According to media reports, the government has put on hold the cancellation of coal blocks allotted to the company due to pending court cases.

The government had taken a note of pending court cases of Tata Sponge and Lanco Group and decided to put its de-allocation orders on hold, the Economic Times report suggests.

Meanwhile, since January 17, the stock has outperformed the market by surging 45% from Rs 297 after reporting an 18% year-on-year (yoy) jump in net profit at Rs 24.31 crore for the quarter ended December 31, 2013  on back of strong operational performance. The benchmark S&P BSE Sensex has declined 2.1% during the same period.

EBITDA or operating profit of the company grew 47.5% yoy at Rs 40 crore, while margin improved by 700 basis points to 20.8% during the recently concluded quarter.