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Tata Steel Q 1 net rises by 24%
By agencies
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Thursday, 28 July 2005, 19:30 IST
MUMBAI: Tata Steel has reported a net profit of $210 million in the companyÂ’s first quarter ended June 30, 2005, a 24 percent growth over $169.4 million in the corresponding quarter the previous fiscal.
The companyÂ’s net sales stood at $787.5 million, a growth of 9.51 percent, compared with $ 719.1 million reported in the corresponding quarter the previous year.
Tata SteelÂ’s topline growth was below expectations of the leading steel analysts who predicted about 30 percent growth in sales for the quarter under review.
The company achieved better operating margin of 45.8 percent for the quarter under review against 44.3 percent for the corresponding quarter the previous year.
For the quarter stated, the companyÂ’s steel production was down at 9.45 lakh tonne compared with 9.93 lakh tonne for the corresponding quarter the previous year.
“As steel prices keep falling, dealers defer their stocking up of steel for future as they expect prices to fall further. This leads to piling up of the inventory. Automatically, it cuts production in the hope of liquidating the inventory,” said a leading steel analyst in the country.
Global steel prices have fallen over the past couple of months. Steel prices in India, at present, have come down to Rs 22,000 per tonne, a 30-40 percent decline, compared with Rs 29,000 per tonne three months ago. Global steel prices have come down to $ 400 per tonne from $ 700 a few months back.
Tisco and other large steel companies like Steel Authority of India Ltd (Sail), Jindal Steel, Essar and Ispat have recently cut steel prices in the range of Rs 2,000 to Rs 3,000 per tonne. This was the second cut in recent months. It followed a cut in April when some of the companies had cut prices by about Rs 2,000 per tonne.