Harsco Corporation (HSC) recently announced that it has won a new multi-year contract worth over $225 million from JSW Steel Ltd - the largest steel producer in India with an annual production capacity of 14.3 million tons - for onsite services primarily related to resource recovery and slag management.
JSW Steel, a part of JSW group, has diversified interests in mining, carbon steel, power, industrial gases, port facilities, aluminium, cement, and information technology.
Harsco already has existing business ties with JSW Steel’s associate company, JSW Ispat Steel's Dolvi plant in Maharashtra. It also provides various industrial services at its plant in Vijaynagar, Karnataka. With this contract, JSW will be able to cut down on its raw material costs besides optimizing recovery of metallic units from slag, thus minimizing wastages.
On the other hand, Harsco would benefit by expanding in emerging markets like India and establishing itself as premier industrial company offering dedicated services to infrastructure-oriented sectors like steel. India is expected to become the second-largest steel producer by 2015 given its currently-planned capacity expansion projects. Harsco aims to develop its long-standing business relationships with JSW steel, besides capitalizing on newer opportunities.
In the last reported quarter, Harsco posted adjusted diluted earnings per share of 39 cents from continuing operations compared with 40 cents in the year-earlier quarter. The results surpassed the Zacks Consensus Estimate of 37 cents and also exceeded management’s guidance range of 32 cents to 38 cents per share for the quarter.
Headquartered in Pennsylvania, Harsco is a diversified, multinational provider of market-leading industrial services and engineered products. The company serves global infrastructure, metals, minerals, rail, and industrial sectors
Harsco currently has Zacks #4 Rank (short-term Sell rating) along with a long-term Neutral recommendation. One of its competitors, SPX Corporation (SPW) also holds a Zacks #4 Rank.
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