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Saturday , November 24 , 2012
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Auto impact on steel

Calcutta, Nov. 23: Tata Steel Processing and Distribution Ltd (TSPDL) may fall short of its sales forecast for the fiscal because of poor demand from the auto sector.

Abraham Stephenos, chief operating officer of TSPDL, a wholly owned subsidiary of Tata Steel, today said the growth in topline could be lower than the 25 per cent forecast for the fiscal.

“We will be growing a little bit above our last year’s sales, but not as much as we had planned. Originally, we had planned about 25 per cent growth (for this fiscal) it is too early to say, but it may not be 25 per cent growth,” Stephenos said on the sidelines of an interactive session of the Indian Institute of Material Management today.

The automotive steel maker had registered sales of Rs 1,867.74 crore in 2011-12, a growth of 17 per cent over the previous fiscal.

Stephenos attributed the slowdown in sales to an almost flat growth in the auto sector that constitutes a lion’s share of its total demand.

“Automobile is one of our big customer segment. About 70 per cent of our products go to the automotive sector. So, the slowing down in the segment has an impact,” he said.

The Society of Indian Automobile Manufacturers has lowered car sales growth projection to just 1-3 per cent for this fiscal from the 9-11 per cent announced in July because of high interest rates and a slowdown in demand.

In the second quarter of this fiscal, passenger vehicle sales, including cars, grew just 4 per cent at 6,18,000 units against 5,93,000 units in the year-ago period.

Stephenos also said demand for commercial vehicles as well as construction and mining equipment were witnessing a downfall and inventories were piling up.

“When everybody has to slow down, round the chain we are also affected,” he said.