Tata Steel gets Corus boost, net at Rs 12,322 cr

Written by Corporate Bureau | Mumbai, Jun 26 | Updated: Jun 27 2008, 05:57am hrs
Indias second largest and worlds fifth-largest steelmaker Tata Steel on Thursday said that it made a net profit of Rs 12,321.76 crore for the year ended March 31, 2008 as compared to Rs 4,165.61 crore in financial year 2007.

Boosted by the addition of Anglo-Dutch Corus Group Plc it acquired last year. Consolidated total income increased from Rs 25,650.45 crore for the year ended March 31, 2007 to Rs 1,32,110.09 crore for fiscal 2008.

The full-year profit, excluding contributions from Corus Group Plc, rose 11%, aided by higher product prices. Net profit rose to Rs 4,687 crore in the year ended March 31, compared with Rs 4,222 crore a year ago. Net sales rose 12% to Rs 19,690 crore from a year earlier.

The Tata Steel stock was up 1.90% to close at Rs 757.10 on the Bombay Stock Exchange. The stock is down 19% this year compared with a 29% drop in Indias benchmark sensitive index.

A global shortage of steel helped Tata increase product prices for builders and auto companies, more than covering record raw material costs. Tata bought rival Corus last January for $13 billion to tap growing European steel demand.

We are targeting to increase the return on capital to 30% till 2012, said B Muthuraman, MD, Tata Steel. Demand for steel globally, is expected to grow 5-6%, said Philip Varin, CEO, Corus Group Plc.

Kaushik Chatterjee, the companys CFO said that it is targeting a sustenance capex and brownfield expansion financed through internal generation. The company will also be raising structured equity for greenfield projects in the next 18 months and will reorganise group structure to unlock value in the next 6-12 months for planned growth in raw material assets and new market entry.

Tata Steel sells more than two-third of its output in Europe.