Seshagiri Rao, Joint Managing Director and Group CFO, said domestic sales were up by 10 per cent and that the sale of value-added products comprised 33 per cent of total sales.

This apart, the lower price of iron ore and coal helped improve margins. The company imported 1.71 million tonnes of iron ore during the period.

Imports may go up Earnings before interest, taxes, depreciation, and amortisation margins rose to 20.4 per cent against 19.4 per cent in the year-ago period.

Given the shortage of iron ore domestically, and the fact that prices were moving upwards against declining global prices, iron ore import by the company was bound to go up, he added.

Outlook The Indian economy posted a moderate recovery in the first quarter of FY-15.

However, Rao added the improvement in overall activity seems to have got hit by weaker monsoon, subdued industrial growth in the second quarter and elevated interest rates.

While medium-term business sentiment remains strong, he said the expected revival of the investment cycle now appears likely in FY-16.

The domestic steel industry has battled against a surge in imports, especially from China and South Korea.

This, coupled with a seasonal weakness and subdued economic activities, has resulted in the country's steel consumption remaining flat.

Constraint of domestic iron ore availability, consistently large imports at concessional duty from Japan and South Korea, as well as rising imports from China and a growing imbalance of global steel supply and demand remain major challenges for the Indian steel industry, Rao added.

On Tuesday, the company’s scrip closed 2.85 per cent higher at ₹1175.65 on the BSE.

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