Tata Steel turns profitable in third quarter, reports consolidated net profit of Rs 231.40 crore

Tata Steel on Tuesday reported a consolidated net profit of Rs 231.40 crore for the December quarter. The steel major's healthy financial health was mainly driven by improvement in sales volume and higher prices of steel.

It had registered a consolidated net loss of Rs 2,747.7 crore in the same quarter of the previous fiscal.

The consolidated gross sales increased to Rs 29,279 crore, from Rs 25,662.3 crore in the year-ago period.

In a statement, the company said: "Consolidated revenues (are) up by 7 per cent sequentially and 14 per cent year-on-year. The growth is largely driven by strong performance from Indian operations."

However, the total expenses went up to Rs 27,232 crore in September-December, up around 4 per cent from a year earlier.

"Tata Steel recorded strong sales this quarter as the strength of our franchise helped us counter headwinds due to demonetisation. While the broader market was affected by lower rural sales and adverse consumer sentiment. We were able to increase overall volumes by 14 per cent sequentially and register strong growth across all our target customer segments," said T V Narendran, MD, Tata Steel India and South East Asia.

"Further, our focus on cost improvement initiatives and integrated operations helped us contain the impact of rising raw material prices."

Its Kalinganagar facility "continues to ramp up smoothly and we are well positioned to serve the increase in demand due to the expected thrust on infrastructure in 2017-18".

"Our SEA operations delivered stronger operating performance this quarter due to a combination of better market conditions, cost rationalisation and higher exports," he added.

According to Koushik Chatterjee, Group Executive Director (Finance and Corporate), the strategic initiatives in the UK on the pensions continue to be a priority for the company.

"We welcome the unions' recommendation to its members to support the ballot process that is currently on to close the BSPS (British Steel Pension Scheme) to future accruals. This is part of the several steps being undertaken to make the UK business more sustainable in future," Chatterjee said.

"We continue to be deeply engaged with the British Steel Pension Trustees and the regulator towards developing a structural solution for the UK pensions in coming months."