Tata Steel profit flat on higher costs

CORPORATE SCORECARD

Tata Steel, the world's sixth-largest steelmaker, has recorded a flat third quarter net profit (standalone) of Rs 1,068.58 crore compared with the Rs 1,063.75 crore profit the company posted in the corresponding period a year ago.

Tata Steel, which bought the Anglo-Dutch firm Corus Group last year, said profit before interest, exceptional items and tax was Rs 1,954.43 crore, an increase of 16.10 per cent over the previous corresponding quarter.

However, interest payments had jumped many times over in this period to Rs 362.67 crore, against Rs 52.03 crore.

The exchange gain from the rupee's appreciation was at Rs 47.92 crore.

Net income from operations increased 11.28 per cent to Rs 4,973.92 crore, but an 11.94 per cent increase in raw material cost to Rs 930.85 crore may have pulled down margins.

Tata Steel's standalone raw material security which was 80 per cent has now reduced to 17 per cent after Corus.

The company has targeted a 50-60 per cent security over the next 3-4 years.

Industry analysts say steel companies are expected to raise prices from February and that could reduce the impact of rising raw material costs.

The Tata Steel stock gained gained 1.38 per cent on the Bombay Stock Exchange on Thursday to close at Rs 733.50.