Tata Steel Q2 net dashes market hopes

Mumbai, Oct 30 | Updated: Oct 31 2006, 06:13am hrs
Indias largest private sector steel producer Tata Steel failed to meet market expectations on Monday, posting just 5.3% growth in Q2 net profit to Rs 1,101.49 crore, against Rs 1,045.42 crore in Q2, 2005-06. Net sales were up 7.5% to Rs 4,724.53 crore, against Rs 4,395.08 crore.

On a day when the Sensex closed above the 13K mark, Tata Steel shares were down 0.42% (Rs 2.10) on the Bombay Stock Exchange, at Rs 498.35, compared with Rs 500.45 on Friday.

In his first interaction with the media since the announcement of Tata Steels deal with Corus, the companys managing director B Muthuraman said, If you look at steel companies all over the world, profits have declined in the first half of this year compared with the first half of last year due to a softening of steel prices this year, whereas Tata Steel has produced higher profits.

Muthuraman attributed better profitability to an increase in market share in the automobile sector and continued focus on branded products, which he claimed was comparatively free from the cyclical nature of commodities like that of hot-rolled coils. The company has also cut costs on raw materials, fuel and power and has had higher labour productivity.