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Tata Steel forges ahead with 130 pc rise in Q2 profit

Our Bureau

Mumbai , Oct. 29

TATA Steel continued its robust performance, reporting a 130 per cent increase in net profit at Rs 929.59 crore for the second quarter of 2004-05 as against Rs 403.10 crore in the year-ago period.

A richer product mix, along with improved realisations and strong demand, helped the company.

Sales for the first half stood at Rs 4,107.31 crore (Rs 2,940.98 crore).

According to Mr B. Muthuraman, Managing Director, the company's product mix has been growing richer quarter after quarter. Cold rolled coils have increased to 34 per cent from 29 per cent in the year-ago period.

Sales of branded products also increased to Rs 1,499 crore from Rs 1,033 crore previously. Branded products offer a premium of 10-15 per cent on prices, Mr Muthuraman said.

Ferro chrome and minerals' contribution has also been growing. In the world market, chrome ore and concentrates account for 14 per cent of the market share, higher than Tata Steel's steel exports, he said.

The EBITDA (earnings before interest, tax, depreciation and amortisation) margin moved up to 44.59 per cent (30.46 per cent). "Our EBITDA margins are higher than international players," Mr Muthuraman said.

Production during the second half would see a dip because of the company's plan to shut down its G-Blast furnace for 100 days, starting December 2004. However, other facilities will increase production to keep pace.

Tata Steel has submitted an expression of interest to set up a steel plant in Bangladesh.

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