Tata Steel stock slips on posting poor results

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Tata Steel stock slips on posting poor results
Tata Steel: Quotes, News
BSE 625.85BSE Quote3.9 (0.62%)
NSE 625.40NSE Quote5.8 (0.93%)
Tata Steel slipped on the Bombay Stock Exchange for posting poor results. It's net profit for the second quarter ended Sept 30 fell by 89% to Rs 212 crore from Rs 1,979 crore reported a year ago.

The company's scrip fell by 5% on the BSE to Rs 423.60 crore after the results.

Similar trend was seen on the National Stock Exchange as well, the stock was seen down at Rs 423.15.

The fall in profits was due to rising cost of raw materials i.e. iron ore and coal.

The debt crisis in major countries of the Europe was also one of the major reasons of the fall in profits, as the demand for steel shrank in Europe during the quarter.

High inflation in India, followed by rising interest rates are hitting the profitability of the major Indian corporates.

The net income of the company rose by 16% to Rs 32,507 crore during the quarter against Rs 28,091 crore a previous year quarter.

The net debt of the company at the end of Sept 30 was at around Rs 45,056 crore against Rs 46,627 crore at the end of March 2011.

Commenting on the results, Mr Mr HM Nerurkar MD of TATA Steel said that “TATA Steel's Indian operations performed strongly despite the overall soft market situation. The continued interest rate hikes impacted steel demand growth, but the Company sequentially increased sales volumes due to enhanced market reach and customer focus.”

“Higher raw material prices and adverse currency movements impacted profits in Q2 FY'12, but the focus on company-wide cost saving initiatives yielded desired results,” he added.


Story first published: Friday, November 11, 2011, 11:57 [IST]
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