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Q.

It is reported that Tata Chemicals is doubling its urea capacity in Barbala with an investment of Rs 2500 crores. Is it a worthwhile investment in the current price control scenario? Your views?

Asked by Good Citizen, 15 Jul '10 12:59 pm
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Answers (2)

 
1.

There must be some reason that they are going for this huge expansion. Last year, the net ROR (PAT) for the company was just 8% of their gross sales. i.e. 434 crores against a sale of 5412 crores. But they have huge reserves of 4039 crores. The holding company being Tata Sons, they are already diversified in various fields and I dont think, it is their policy to diversify an existing company in a particular field to a new one away from their core business.

Thus this huge amount would be better utilised in expansion plans and would benefit the country. We are importing huge quantiy from abroad and the foreign manufacturers are making merry because every time they anticipate a shortage in the Indian market, they fix the prices to higher levels.

I am not sure, but the Govt must be giving some tax holiday or reduced excise duty concessions for any green field projects or expansion plans so as to entice the Indian companies to invest in this field. If I am not wrong, this will be bas ...more
Answered by Omega, 15 Jul '10 03:55 pm

 
  
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2.

Must be
if TATAS think so
Answered by anil garg, 19 Nov '10 08:36 pm

 
  
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