Our performance continued to be robust in spite of inflationary concerns on the back of improved product mix and efficiency enhancement measures.
HM Nerurkar MD, Tata Steel
Tata Steel’s access to the major steel markets in the world makes it one of the familiar brand names globally. While its presence in Europe following the acquisition of Corus has added to its topline multi-fold besides taking it to the number five among the top steel makers, it is for the time being dragging its profit. This is expected to continue at least till the European region completely comes out of the woods.
But the poor show of its European operation is likely to be compensated by rising demand in India which contributes about 26% to the company’s total sales. Tata Steel has more than doubled its consolidated net profit to Rs 1,003 crore for the quarter ending December 2010 in spite of lower deliveries of its European operation. The world’s fifth largest steel producer’s robust performance has come in the face of rising raw material cost which had significantly impacted the yield of some of its local peers.
For the first nine months of the current fiscal the group posted a net profit of Rs 4,807 crore compared to a loss of Rs 4,443 crore in the same period a year ago. Its total income during the period stood at Rs 84,929 crore, up 13% over Rs 74,889 crore in the corresponding period of 2009-10.
“The performance of the Indian operations in the third quarter continued to be robust in spite of inflationary concerns on the back of improved product mix and efficiency enhancement measures. The expansion at Jamshedpur is expected to provide an impetus to future earnings,” Tata Steel managing director HM Nerurkar said.
While Steel deliveries of the company fell 5.7% to 5.68 million tonne in the last quarter on lower demand in European markets, especially in the automobile and construction sectors, the company is expected to negate it with rising demand in India. The steel giant has an annual crude steel capacity of over 27 million tonne