In the first quarter of the current fiscal, SAIL has reported a loss of Rs 311 crore, against a loss of Rs 126 crore in the corresponding period of the previous financial year. For the full year to March 31, 1998, the steel major had reported a net profit of Rs 149 crore, although the comptroller and auditor general has observed a negative impact of Rs 6.29 crore on it. SAIL has agreed to rectify the amount in the current fiscal.

IDBI, which had also been asked to suggest remedial steps, has submitted its initial analysis to SAIL chairman Arvind Pande. The final report will be handed over by the end of this month.

SAIL insiders feel that IDBI's fears are not exaggerated. At the same time, they point out that SAIL is not in a position to arrest the trend as there are no signs of the steel market picking up or the economy improving. SAIL's Rs 10 paid-up share, which slumped to Rs 6 on Friday in Calcutta, closed at Rs 6.50 on Monday. During 1997-98, SAIL's exports grew by 115 per cent over the previous year, fetching Rs 1,087 crore from about one million tonnes of pig iron and steel. SAIL, however, has not been in a position to sustain this export growth in the current fiscal as the depreciation of the south-east Asia currencies made their steel cheaper.

Since the government is yet to make up its mind on imposing anti-dumping duties as demanded by domestic steelmakers, SAIL will continue to be hit by dumping from a number of countries. Hence, improvement of its bottomline seems to be impossible this fiscal even if it succeeds in cutting costs by Rs 1,000 crore on top of the Rs 700-crore cost savings it will continue to maintain this year. Although some of SAIL's modernised units are showing signs of improvement in techno-economic parameters, it is unlikely to gain much in the face of declining demand in general.