New Delhi, Oct. 30: The steel behemoths — Steel Authority of India Ltd and Tata Steel — have ratcheted up profits in the first half of this financial year, aided by a series of price increases over the year.
SAIL announced a net profit of Rs 761 crore in the first half against a loss of Rs 467 crore in the year-ago period.
“About half of the Rs 1,200 crore swing in profits from last year’s loss situation comes from price increases, the rest because of our efficiency,” claimed a visibly pleased SAIL chairman V. S. Jain.
Tata Steel reported a 153 per cent jump in first-half net profits at Rs 670.17 crore against Rs 264.87 crore in the corresponding period last year.
Tisco chief B. Muthuraman too agreed that higher prices had contributed in large part to Tisco’s better results.
Shares of the top two steel makers shone after they reported huge jumps in half-yearly profits. SAIL spurted 5.6 per cent to Rs 44.95, while Tisco climbed a similar 5.2 per cent at Rs 347.90.
SAIL’s net profit touched an all-time high of Rs 505 crore in the second quarter ended September 30, doubling the Rs 255 crore profit earned in the first quarter, officials said, while pointing that only in 1995 the company had recorded its best profit of Rs 1,300 crore.
Tata Steel, too, reported a significant jump in second quarter net profit. It registered a 100.8 per cent jump in net to Rs 403.10 crore as against Rs 200.66 crore in the year-ago period. Net sales rose to Rs 2,612.99 crore (Rs 2,078.82 crore).
Muthuraman today announced that on top of the one million tonne capacity expansion work which was going on, Tatas would add another 2 million tonnes after 2005, taking their total steel making capacity to 7 million tonnes.
The state-run behemoth, which had gone through a bad patch with red ink all over its balance sheet through the last few years, marked its recovery with boxes of sweets for all employees. It still has an outstanding liability of Rs 1,099 crore in the market, but its debt-equity ratio has fallen sharply from an over 6 figure last year to 3.8 now.
However, Tata Steel’s profitability remained higher than SAIL’s. While the state-run major posted Rs 760 crore profit on a turnover of Rs 10,760 crore which meant a 7 per cent profitability, Tata Steel posted its profit figures on a lower sales of Rs 5,463 crore, implying a 12 per cent profitability ratio.