Mumbai, July 23: Helped by brisk sales of better priced value-added items, Tata Iron and Steel Company’s (Tisco) first-quarter profit skyrocketed 316 per cent to Rs 267 crore from Rs 64.21 crore same time last year.
The stellar gains were driven by a ramp-up in crude steel production above one million tonnes for the first time as sales jumped 17 per cent to 9,10,000 tonnes.
Tisco’s scorcher signifies the end of the bad patch for the steel industry, which has seen a swell of demand from user industries like housing, automobile and the booming core sector, apart from the surging tide of exports to China, over the past couple of months.
The 27 per cent jump in turnover beat the 10 per cent rise in output and the 6 per cent increase in sale volumes, largely because of more value-added items. Export earnings leapt 76 per cent, while the proportion of turnover from branded steel rose from 16 to 22 per cent.
Investors happy that the numbers were better than their expectations lapped up the share, but a late-session profit booking dissolved much of the gains by the time the stock closed up 70 paise at Rs 186.70 on BSE; 66.21 lakh shares, valued at Rs 123.89 crore, were traded.
Addressing shareholders at the company’s 96th annual general meeting, chairman Ratan Tata said the second largest steel company in India after SAIL, plans to add one million tonnes of capacity by debottlenecking its Jamshedpur plant. Money for the expansion will come from internal accruals.
Among the highlights for the first quarter was the export order that Tisco bagged for supplying cold rolled coils to Proton, the first time that the leading coil manufacturer of Malaysia decided to buy from the Tatas.
Managing director B. Muthuraman said in his presentation to shareholders that the company was among the lowest cost steel producers in the world.
Asked about the company’s titanium project, Tata said it was still years away. “It is at an exploratory stage. This is the future and we would like to have a stake in that. However, I won’t see it. We won’t see it. The next generation may see it,” he said as J. J. Irani, the man credited with conceiving the project, looked on.