Tata Steel net profit surges 50% to Rs. 1,788 crore
Tata Steel informed on Friday that its net profit for the second quarter ended September 30, 2008 increased 50% to Rs 1,787.81 crore against Rs 1190.83 crore in the same period of last fiscal. Sales were also reported higher by 43% at Rs 6,744.16 crore against Rs 4,724.85 crore. Production was up 4% at 1.33 million tones.
The company attributed increase in net profit due to higher net realizations and higher proportion of value added products. The company clarified that the results do not include the figures of Corus Group Plc which will be announced in November 2008.
Tata Steel's chief operating Officer Hemant Nerukar informed that the global steel prices have fallen by almost 30% and the company expected domestic steel prices to fall by Rs 3000 to Rs 4000 per tonne. He did not expect a big drop in volumes due to heavy construction activity. Mr. Nerukar informed that in the second half of the year, production will increase to 6.8 million tonnes.
It was informed that the company was well funded and has liquid cash in excess of Rs 1500 crores. Meanwhile the share price of Tata Steel crashed by 14.46% on Friday to end the day at Rs 178.30 on the BSE, compared to Sensex fall of 10.96% to close at 8,566.82 points. Due to recession fears and investors reducing their exposure in commodity firms on concerns that the demand for metals will reduce due to economic slowdown, the company has lost 81% of its value this year.