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Net dips on falling sales

business Updated: Jan 29, 2009 10:39 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Tata Steel on Wednesday reported a 56.4 per cent fall in net profit for the third quarter ended December 31. Falling sales volume, increased cost of raw material posed a tough time for the steel major.

The country’s largest steel company reported a net profit of Rs 466 crore during the third quarter against Rs 1,069 crore a year-ago. The firm’s performance was below expectation during the quarter as its net sales declined from Rs 4,973.92 crore to Rs 4,735.68 crore. The company also suffered a foreign exchange loss of Rs 127 crore.

The drop in sales volume by around 14 per cent resulted in increased steel inventory of Rs 636 crore against Rs 61 crore last year. The cost of raw material also increased by Rs 709 crore, from Rs 902 crore to Rs 1,611 crore, while the margins declined from 40.2 per cent to 29.8 per cent year-on-year.

The total income of the company dropped by 3.45 per cent, from Rs 4,973.92 crore in third quarter last year to Rs 4,802.14 crore this quarter. Shares closed own 2.6 per cent at Rs 176.8 on the Bombay Stock Exchange.