Mumbai, Jan. 23: Reaping the benefits of improved product mix, volume and price hikes, the net profits of Tata Iron and Steel Company (Tisco) skyrocketed 711 per cent to Rs 280.23 crore for the third quarter of 2002-03 against Rs 34.54 crore in the corresponding period of last year.
The surge in profits beat analysts’ expectation of a net profit of Rs 250 crore in this quarter.
The news created a flutter in the markets as the Tisco share, after hitting an intra-day low of Rs 155.10, catapulted to close at Rs 161, a 10-month high gaining Rs 3.15 from the previous day's close.
Managing director B. Muthuraman said sustainable factors like ‘improvement in product mix coupled with higher volumes’ have enabled the steel major to announce such stupendous results.
The quarter under review has seen the highest ever profit-before-tax of Rs 353.11 crore and the highest ever profit after tax in the history of the steel maker.
Total income rose 7.49 per cent to Rs 2152.69 crore from Rs 1694.62 crore in the previous corresponding period.
However, the management’s efforts to progressively hike the component of high-value steel helped the company’s performance, Muthuraman said. “Our major focus has been to improve the product mix, customer mix and branding of products,” he added.
Muthuraman had said in December that the company would post good results in the third and fourth quarter of this fiscal, partly because of higher-than-expected output.
“That volume has given us much more cold-rolled and galvanised steel to sell,” he said.
Cold-rolled steel meant for the auto and appliances segment has increased 70 per cent this quarter to 102,000 tonnes from 60,000 tonnes. “Every quarter we have increased the tonnage,” he added.
Indicating that there is more growth to come in the coming months, Muthuraman said, “We have the potential to improve the product mix on a quarter to quarter basis.”
He said the company would exceed this year's output target of 3.8 million tonne which was announced in June. Tisco produced 3.59 million tonne of steel last year.
Allergic to any talk of the recent price hikes being the cause of Tisco's stupendous performance, Muthuraman said: “One doesn’t market steel, like one markets vegetables. We don’t change prices so frequently,” he said.