Tata Steel Q1 profit more than doubles to Rs 19.34 bn, still below estimate

Tata Steel India posted a rise of about 7.9% in total steel deliveries for the quarter

Tata Steel Ltd's quarterly net profit more than doubled, but still came in well below market expectations, hurt by rising expenses and a one-off charge.  

The country's biggest steel producer by assets said it took a one-time charge of Rs 3.44 billion on a consolidated basis. 

The bulk of this came from an exceptional charge of Rs 3.35 billion at its Indian business, mainly due to a provision made for additional interest on differential royalty paid on coal.

Net profit was Rs 19.34 billion ($276 million) in the three months to the end of June, compared to a profit of Rs 9.21 billion a year earlier. That compared with the analyst estimate of a profit of Rs 26.44 billion, according to Thomson Reuters.  

Tata recently agreed to a joint venture with Germany's Thyssenkrupp creating Europe's number two steelmaker, after two years of negotiations, hoping it would help them respond to a volatile steel industry.   

Steel deliveries rose over 12 per cent to 6.55 million tonnes, while Tata Steel India posted a rise of about 7.9 per cent in total steel deliveries for the quarter. 

Tata Steel said total revenue from operations rose 22.1 per cent to Rs 378.33 billion, while total expenses rose about 21 per cent.

Tata Steel, which picked up a controlling stake in debt-laden Bhushan Steel Ltd to increase its capacity in India, said it has launched a programme to boost synergies with Bhushan.

Bhushan Steel, which was among a dozen companies pushed to bankruptcy court last year amid a government drive to clear a mountain of bad loans choking credit at Indian banks, has an annual steelmaking capacity of about 5.6 million tonnes.