State-run steel maker Steel Authority of India Ltd (SAIL) reported 8.6 per cent rise in net profit for October-December quarter at Rs 579 crore on the back of improved efficiencies and lower input costs.
The company had clocked Rs 533 crore net profit in the corresponding quarter of last fiscal, it said in a statement.
“Improvement in profit was helped by factors such as enhanced production, better techno-economic parameters along with reduction in input cost particularly of imported coking coal,” Steel Authority of India said in a statement.
Like other domestic steel makers, SAIL mostly depends on imported coking coal which accounts for nearly 75 per cent of its need. The price of coking coal tumbled by 65 per cent in recent times from its peak in 2011 to USD 115 per tonne on higher supply and lower demand from China.
Turnover of the company, however, was lower by 3 per cent for the quarter at Rs 12,291 crore impacted by higher imports and nearly flat steel consumption in the country.
“The turnover was adversely impacted due to prevailing challenging market conditions, fraught with high imports and consumption of steel remaining almost flat in the country,” it said.
SAIL said its Board has approved 17.5 per cent interim dividend for the current fiscal which will involve a pay-out of Rs 870 crore including tax on dividends.
“Our initiatives taken to bring down energy consumption and optimise raw material utilisation, as well as adoption of state-of-the-art technologies have helped us improve the techno-economic parameters and stay viable in the current market scenario,” said SAIL Chairman C S Verma.
“With new policies of the government and its thrust on steel intensive sectors, the steel demand is likely to rise. SAIL is ramping up its capacity to match this,” he added.
SAIL is raising its hot metal capacity from 13.8 million tonnes per annum to 23.4 mtpa with an investment of Rs 72,000 crore through brownfield route. It has already operationalised projects worth Rs 32,000 crore till now.
Shares of SAIL closed 2.45 per cent up at Rs 75.25 apiece on the BSE.