Steel City net dips 22%

Visakhapatnam-based broking firm Steel City Securities Limited (SCSL) registered 22 per cent drop in net profit at Rs 5.67 crore during 2006-07, compared with Rs 7.23 crore in 2005-06.

Though SCSL registered a growth in trading turnover, reduction in brokerage charges had affected the net margins, G Rajagopal Reddy, executive director, SCSL, told Business Standard. Trading turnover stood at Rs 44,070 crore in 2006-07 as against Rs 42,284 crore in the previous year.

"Two years back there were hardly 6-8 broking firms in Vizag, but now there are about 60 broking companies. Despite cut-throat competition, we managed to increase our trading turnover. However, for this, we had to reduce our brokerage charges by 20-25 per cent, which impacted our margins," he said.

During the current year, SCSL is targeting a trading turnover of Rs 60,000 crore. "This year we plan to add about 60 new branches across the country as against only 20 last fiscal and therefore expect a further increase in trading turnover," he said.

The company has already added 18 branches this fiscal.

Meanwhile, SCSL is also planning a public issue to mobilise about Rs 40 crore from the market. "We need funds to expand our branch network. For this, we are going for a public issue and have already got in-principle approval from the Securities and Exchange Board of India," he said.