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Tata Steel net down 73 pc at Rs 34.54 cr

Our Bureau

MUMBAI, Jan. 24

IN a scenario of gloom for the steel sector, Tata Iron and Steel Company has maintained profitability with a net profit at Rs 34.54 crore during the October-December 2001 quarter, down 73 per cent from Rs 127.69 crore in the year-ago period.

Income from operations edged up to Rs 1,902.21 crore (Rs 1,868.17 crore). ``A decline in net realisation has been offset by our cost reduction measures,'' Mr R.C. Nandrajog, Senior Vice-President - Finance, Tata Steel, said.

``Our efforts on cost control will continue. We have extended cost control measures to our mines and collieries,'' he said, adding that on an average, Tata Steel is able to achieve 2-3 per cent reduction in costs.

Operating profit during the quarter was Rs 312.86 crore (Rs 418.07 crore).

Other income during the quarter rose to Rs 16.02 crore from Rs 3.62 crore in the year-ago period. This included the sale of obsolete equipment. During the quarter, the company also earned profit of Rs 3.23 crore on sale of long-term investments, which included shares of HDFC and ICICI, Mr Nandrajog said.

In the nine-month period, net profit was Rs 82.43 crore (Rs 344.43 crore) on net sales of Rs 5,446.55 crore (Rs 5,405.94 crore).

Net realisation during the April-December 2001 period dipped by Rs 348 crore, but was somewhat offset by cost reduction.

Interest charges, during the nine-month period, were Rs 306.46 crore (Rs 269.13 crore). However, the company has repaid the high-cost debt and brought down overall loan by Rs 250 crore.

Tata Steel's debt includes Rs 83 crore worth LIC bonds at an interest rate of 18 per cent. These are due in August. The company also has an outstanding loan of Rs 150 crore towards IDBI at an interest rate of 14.5 per cent.

Tata Steel, which produced 9,43,371 tonnes of steel during the December quarter, is expected to produce one million tonnes of steel in the last quarter. Sales, during the December quarter, were 9,25,644 tonnes.

Steel contributed Rs 1,753.18 crore to the revenue in the quarter and Rs 185.77 crore to the profit.

Cold-rolled steel, which contributed 24.5 per cent to the company's sales in value terms, is currently at 65 per cent capacity utilisation. ``We have not ramped up to 100 per cent capacity because the market is sluggish,'' Mr Nandrajog said.

Currently, Tata Steel is supplying exposed steel to Tata Engineering, Ashok Leyland, Bajaj Auto, Hindustan Motors, LML, TVS Motor, Mahindra & Mahindra and Auto Comp. Non-exposed steel is being supplied to Hyundai, Ford, Honda, Krupp and JBM. The company's steel is currently under test with Maruti.

Tata Steel has introduced steel as a branded product — Tata Shakti — and is able to get 5-7 per cent premium on prices.

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