Essar Steel Likely To Record Marginal Rise In Net Profit

Essar Steel is likely to register a slender net profit in its first year of operations ending March 1997 powered by an increased capacity utilisation during the second half of the fiscal. Sources did not speculate on the exact profit figure, but pointed out the unaudited results indicate a strong rebound from the Rs 47 crore loss the company had incurred at the end of the first six months.

The turnaround was realised through greater efficiency by stepping up production during the latter half of the year. Company officials, however, did not comment and said the results will be announced later this month. Essar Steel is also slated to emerge as the largest exporter of hot rolled (HR) coils during 1996-97. The company's receipts from export of HR coils touched Rs 317 crore out of a turnover of Rs 2,200 crore during the year, sources quoted the company's unaudited results. It manufactured 2.4 lakh tonnes HR coils and 80,000 tonnes of hot bricket iron during the year.

 

Essar Steel, which was set up with an investment of Rs 4,500 crore and an installed capacity of 2 million tonnes, had raised its capacity utilisation to 85 per cent during October-March 1997 from 75 per cent in the earlier six months. But it did well on the export front because its products were price competitive.

The company's production cost is low owing to a lean employee strength of 1,800 workers.

Further, its price realisation is close to $300 a tonne, which is also comparable to international standards.