Tata Steel’s consolidated net profit more than doubled in the June quarter to ₹763 crore against ₹337 crore registered in the same period last year. The rise in profit was largely due to lower production cost and income from asset sale.

Net sales were down 17 per cent at ₹29,900 crore (₹36,147 crore).

The overall production cost was down 14 per cent at ₹28,873 crore (₹33,705 crore) with raw material prices dropping sharply. The company registered other income of ₹1,000 crore from sale of investments.

On a standalone basis, Tata Steel’s net profit, however, was down 45 per cent at ₹1,249 crore (₹2,268 crore) as net sales dipped 13 per cent to ₹9,006 crore (₹10,381 crore).

Steel production in the June quarter was down two per cent at 2.10 million tonnes (2.14 mt). A break down in hot strip mill for eight days impacted the sales.

This apart, a major portion of domestic demand this quarter was met through imports which increased 57 per cent to 2.77 mt (1.76 mt). Hot rolled coil prices fell seven per cent quarter-on-quarter.

Tata Steel expects the cost of production to increase with its Noamundi iron ore mines in Jharkhand suspending despatches as the state government stopped issuing forwarding notes (challans).

“The company has taken all measures to ensure that operation of Jamshedpur is not affected. However, there will be a financial impact till the matter is resolved,” it said.

TV Narendran, Managing Director, Tata Steel (India), said the steel industry continues to bear the brunt of a surge in imports and tepid domestic demand which led to a sharp drop in steel prices over the quarter.

Karl-Ulrich Köhler, Managing Director, Tata Steel (Europe), said the steel demand increased modestly. But imports from China have grown at an alarming rate with hot rolled coil shipments increasing over three times the volumes of 2013, he said.

“Surging imports and strengthening Sterling constitute a threat to European steelmaking,” he said. Shares of the company were down five per cent at ₹247 on Tuesday.

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