Tata Steel has posted a consolidated loss in the second quarter of this financial year, while its turnover was up four per cent. The company said European operations suffered from market slowdown and lower steel prices.

The Indian operations posted a 10 per cent drop in net profit, while net sales were up 11 per cent in the July-September 2012 period against the same period last year.

Tata Steel’s shares were down a little over three per cent and closed at Rs 390.55 on the BSE.

A press release quoted Tata Steel Managing Director H.M. Nerurkar as saying that the Indian operations performed steadily against a backdrop of lacklustre demand and increasing imports. Ramp-up of the newly expanded capacity at Jamshedpur resulted in increased deliveries in a soft market. He hoped the recent Government initiatives would drive steel demand. The South-East Asian operations responded well to the tough market conditions and were expected to perform better in the coming quarters.

Karl-Ulrich Kohler, MD and CEO, Tata Steel Europe, was quoted in the release as saying that European steel demand and prices had weakened since Spring and this took its toll on the company’s performance. The company has said overcapacity and low utilisation rates continued to weigh down steel prices and steelmakers’ margins. Steel prices continued to remain soft in developed countries. The European economy was expected to contract this year with only marginal growth potential in 2013.

Tata Steel Europe’s steel deliveries during the quarter were down to 3.42 million tonnes (mt) from 3.57 mt in the same period last year. The Indian operations delivered 1.73 mt against 1.65 mt in the year-ago period.

The board of directors has appointed Cyrus P. Mistry as Deputy Chairman to take over as Chairman when Ratan Tata retires in December. The board also appointed Koushik Chatterjee, Group Chief Financial Officer, as a whole-time director.

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