The growth in net profit is after accounting for extraordinary items. The commendable showing has been made possible by cost-cutting exercise as total expenditure was up fractionally to Rs 1441.40 crore from Rs 1432.65 crore.

Tata Steel succeeded in keeping a tab on raw material consumption that was up by 5.7 per cent to Rs 303.77 crore from Rs 287.61 crore in the period. Both the sales income as well as growth in net profit have been helped by a better price realisation on steel. The price realisation improved to Rs 0.22 lakhs per tonne from Rs 0.20 lakhs.

Exports of steel were up by 17 per cent to Rs 226.64 crore from Rs 193.25 crore. An analyst said that Tata Steel's impressive showing indicates that the steel scenario has changed for the better as steel prices have begun to show a bullish trend recently, and if the trend is maintained, the company can end up the current year with a profit of Rs 550 crore.

The optimism is not misplaced as the steel offtake from the southeast Asian countries now in a recovery phase may grow in the near future. Also, the results would have been even better but for the employees' seperation compensation and the provision for power cost relating to the previuos years.

The Tata scrip closed at Rs 90.20 on Wednesday at the Bombay Stock Exchange, up by 2.2 per cent when it was closed yesterday.