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Falling steel prices and a huge impairment have dragged Tata Steel to a net loss of ₹5,674 crore during the fourth quarter ended March 2015 compared with a profit of ₹1,036 crore in the corresponding quarter last year.
The company had to write down ₹4,951 crore mainly relating to the long products UK business in Tata Steel Europe.
During the quarter, its total income fell 20 per cent to ₹33,666 crore from ₹42,428 crore in the year-ago period.
In addition to the impairment, a surge in cheaper steel products on international markets over the past two quarters has also put pressure on steel prices and squeezing Tata Steel’s margins.
Going forward, the company is seeing mixed signals from its automobile customers and expects that a normal monsoon is critical for revival of rural markets.
TV Narendran, MD, Tata Steel India and South East Asia, said: “We are hopeful that steel demand will rebound this fiscal on the back of higher investments across key industrial and infrastructure sectors as the Government’s Make in India campaign starts yielding results. Credit and liquidity issues among customers remain a cause of concern and the South East Asian operations would focus on exports to regional markets besides cost savings.”
The company expects to commission its 3 million tonnes expansion at Kalinganagar in Odisha by this fiscal besides starting operations in the first phase of its ferrochrome plant at Gopalpur.
The company has recommended an equity dividend of ₹8 per share for FY-2015.
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