Calcutta, Aug. 13: Tata Steel returned to black in the first quarter of this fiscal with Rs 1,139-crore profit on the back of higher sales from Indian operations and lower tax outgo even as the company warned that the situation in the future would be tough both in the domestic market and Europe.
The consolidated profit was 90.51 per cent higher than Rs 597.88 crore in the April-June quarter of 2012-13 and loss of Rs 6,529 crore in the January-March quarter.
Net sales, were, however, down 5.9 per cent at Rs 32,550.21 crore because of subdued global steel demand. The company had reported net sales of Rs 34,605 crore in the first quarter of the last fiscal.
The company said market conditions had become more difficult in India than they were at the beginning of the year as the auto sector continued to suffer. European steel demand is expected to be down 3.1 per cent year-on-year in 2013. But demand may be stronger from the third quarter.
Tata Steel managing director H.M. Nerurkar noted that the Indian operations delivered a steady performance in a subdued market environment with deliveries growing at an enhanced pace over the comparable period of last year.
“Work on the greenfield project in Odisha continues in full swing,” he added.
Tata Steel Europe managing director and CEO Karl-Ulrich Köhler said European facilities recorded higher production volumes after a major plant refurbishment last year.
“There have recently been encouraging signs of improving economic conditions in some European economies, the UK in particular, and we are poised to capitalise should these translate into increased demand from steel-intensive sectors,” Köhler said.
Deliveries were at 2.01 million tonnes in the first quarter in India compared with 1.59 million tonnes in the same period last year, an increase of 25.8 per cent primarily because of the ramp up in capacity in Jamshedpur. In Europe, deliveries totalled 3.14 million tonnes in the first quarter this year, slightly lower than the 3.21 million tonnes in the same period last year.
The tax outgo on consolidated basis dipped nearly 61 per cent to Rs 351.39 crore against Rs 898.63 crore in the year-ago period, Tata Steel said in a filing to the BSE.
The Tata Steel stock closed at Rs 241.15 on the BSE, up Rs 4.6, or 1.94 per cent. The stock rebounded from its 52-week low of Rs 195.40 on August 7.