Equity reserch report on MMTC Limited; ICFAI-SRC, Hyderabad

Abstract

MMTC LIMITED, a Public sector enterprise has faced a lot of rough time in the recent years. Till 1991 it was the sole canalising agency for the export of minerals like Iron Ore, Manganese Ore, Chromium Ore, Coal etc. At the same time it was the sole canalising ageny for the import of Non Ferrous metals like Copper, Tin, Nickel, Zinc & Lead, import of Fertilisers Like Urea, DAP etc. But after the mentioned year lot of items have been decanalised for instance Coal, certain grade of Iron ore, all the non ferrous metals, even the import of urea which was solely handled by MMTC Limited is being imported through four different government agencies from the last year. The changed scenerio has thus definetily affected the performance of the company. After the sales turnover Peaking at Rs. 8115 erores in 1991-92 declined to Rs. 5122 crores in 1992-93, to Rs. 3217 crores in 1993-94, Realising the the gravity of the situation the company has tried to restructure its operations to tune itself to the changed scenario. To begin with it has divided its operations into nine different profit centres. It has allocated its manpower, to the different profit centres. From this year onwards it plans to even maintain its accounts profit centrewise. The biggest task any company faces in the changed scenerio is to change the mindset of its employees. One should bear in mind that the company is basically a Public sector enterprise where the Employee union is very strong, but the credit goes to the management in ensuring that the company has not seen any major problem on the Industrial Relations front in the past, nor since the decanalisation started. The management has been able to drive home the point that if the company has to survive in this competitive environment then it has shed its laid back attitude and treat the word of customer as the last word. Even the people down below have understood the call of the hour and responded positively, but one should bear in mind that to change the culture of the company, it takes time. On the operational front also the company has shown a turnaround in the last year. Immediately after the decanalisation the market share of the company in the non ferrous metals category saw a decline. But by changing its marketing strategy and responding to the customers requirements immediately it has been able to get back its market share in this product category. Besides these changes the company has identified various thrust areas which include Agro Products, Marine Products, Textiles, Garments & Leather Products. These products shall he the future breadwinners of the company.