Tata Steel, Hindalco dip 3% on weak Q2 nos

Tata Steel and Hindalco Industries have plunged more than 3% each after reporting lower-than-estimated net profit for the second quarter ended September 2011 (Q2FY12) due to cost escalations and constraints in bauxite and coal availability in wake of the heavy monsoons this season.

Tata Steel has slipped 6% to Rs 424 after reporting 93% year-on-year (y-o-y) decline in consolidated net profit to Rs 139 crore for Q2FY12 due to higher raw material costs.

The Tata Group company had clocked a profit of Rs 1,968 crore in the corresponding quarter last fiscal. However, net sales grew 16% to Rs 32,507 crore on a y-o-y basis. The company's total expenditure also went up to Rs 31,157 crore during the quarter against Rs 26,052 crore in the year-ago period.

Hindalco has dipped 4% to Rs 130 on reporting a net profit of Rs 503 crore for Q2FY12 against Rs 434 crore in the corresponding quarter last fiscal; its revenues were Rs 6,272 crore against Rs 5,860 crore in the same quarter in 2010-11. Analysts expected the Aditya Birla group company to register a net profit of Rs 511 crore from during the recently concluded quarter.

“The second half of FY12 will be difficult due to global uncertainties, falling LME prices and persisting cost pressures. Weak consumer and business sentiment seem to be threatening the pace of global economic recovery," Hindalco said in a filing to the stock exchanges.