Tata Steel has returned to profit in the first quarter of the current fiscal after a loss a year ago, helped by the ramp-up of its Kalinganagar plant in Odisha and better performance in Europe.
The company posted a net profit of ₹ 921.09 crore for the quarter ended June’17 compared with a loss of ₹ 3183.07 crore in CPLY (corresponding period last year).
During the reporting quarter, Tata Steel's local operations witnessed deliveries increasing by 28 per cent over the year ago period. This was largely due to the successful ramp up of its Kalinganagar facility.
Tata Steel's domestic performance was also aided by a robust 19 per cent rise in the sales of retail and branded products. These products now constitute close to 48per cent of the total sales.
In Europe, on the other hand, Tata Steel saw a growth of 7 per cent in liquid steel production. However, deliveries were lower by 3 per cent over CPLY and 16 per cent less than the preceding year. The consolidated turnover of Tata Steel was higher at ₹ 30973 crore compared to ₹ 25971 crore in the year ago period but lower than ₹ 35305 crore in the preceding quarter.
During the reporting quarter Tata Steel sold is stake in Tata Motors to its parent Tata Sons for a consideration of ₹ 3778 crore. Tata Steel's net profit would have been higher had it not been for a provision of ₹ 614.41 crore made by the company pursuant to a Supreme Court judgement.
"Our sales were up by 28 per cent on ay-o-y basis as the smooth ramp up of our Kalinganagar plant helped us increase our market share, " T.V.Narendran, MD, Tata Steel India and South East Asia, said.
Koushik Chatterley, group executive director - finance and corporate, said though gross dent increased by ₹ 4798 crore during the period, the liquidity position of Tata Steel group remains strong with ₹ 16109 crore in cash and can equivalents alone.