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Shares of Tata Steel fell to their lowest in a month after the country's top producer of the alloy reported a loss bigger than analysts' estimates. The stock fell 5.3 per cent to Rs 342.25 at close here and was the worst performer on the S&P BSE Sensitive Index. The shares have declined 14 per cent this year, compared with a 1.1 per cent gain in the Sensex.
After writing down assets in the UK, Tata Steel's net loss was Rs 5,670 crore ($890 million) in the three months ended March, compared with the average Rs 4,900 crore loss predicted by four analysts in a Bloomberg survey.
This has been "another kitchen-sinking quarter" for the alloy maker, Sanford C Bernstein & Co analysts Vanessa Lau, Jessica Zhou and Alex Leung wrote in a research note on Thursday. The company took a Rs 4,950-crore non-cash writedown on its long-products business in the UK, which it plans to sell, because of poor demand and lower prices for the construction-grade alloy.
The company has also fully written off the value of the business it intends to sell to Klesch Group and the talks could reach a conclusion in a "couple of months," Koushik Chatterjee, group executive director for finance, told reporters in Mumbai on Wednesday.
Sales in the quarter declined 21 per cent to Rs 33,340 crore, while domestic profit margins narrowed because of record imports. Tata Steel had reported a 10.4 billion-rupee profit in the same quarter a year ago.
