A dismal topline show and mediocre performance by public sector steel major Steel Authority of India (SAIL) skewed the aggregate financials of the steel industry for the quarter ended March 2001.
Fifty six steel firms' aggregate sales income dipped 0.56 per cent to Rs 10,023 crore compared with the same quarter last year.
The sector slipped into the red with an aggregate loss of Rs 88.6 crore against an aggregate profit Rs 370 crore.
The prime culprit being rising interest cost, which accounted for 8 per cent to sales income. Interest outgo increased a whopping 61.9 per cent to Rs 831 crore.
The only respite was in the form of higher income from other sources, which increased by 627 per cent to Rs 333 crore.
Excluding SAIL, the topline of 55 firms increased by 10.8 per cent to Rs 5,118 crore. SAIL, gripped by a demand slowdown, reported a 10.2 per cent drop in sales income to Rs 4,905 crore for the last quarter.
The steel major, which accounted for 49 per cent of the sector's sales income for the quarter, reported a loss of Rs 30.95 crore against a net profit of Rs 344.8 crore in the previous year's corresponding quarter.
Despite the sector's cyclical nature, overseas factors too stifled the industry's performance. Anti-dumping duties and floor prices by global major markets came as a blow to steel exporters.
However, a more optimistic news for the aggregates, has been that the sector's net loss for the last quarter has been much lower to the ones reported in the previous three quarters of the fiscal. The drop in loss was largely due to a reduction in losses by SAIL.
For the December-ended quarter, aggregate net loss was Rs 210 crore, while for the quarter ended September 2000 it was Rs 278 crore and June-ended quarter Rs 144 crore. A richer product mix, marginally improved realisations, continuing control over costs contributed to bottomline during the quarter, says an industry analyst.
Excellent performance by private major Tata Steel also cushioned the aggregate show. The company, riding on better realisation, scored an 11.5 per cent increase in sales income to see its bottomline post a 12.4 per cent rise. Few steel tubes and pipes manufacturers too chipped in with better performances for the quarter.
Saw Pipes reported a gain of 45.5 per cent in sales income and 53.7 per cent in net profit. While Maharashtra Seamless' sales income increased 29.7 per cent and net profit by 92 per cent.
