SAIL Q3 profit rises 32% on higher sales

Steel Authority of India (SAIL), the country's largest steel producing company, has reported a 32 per cent increase in its net profit for the quarter ended December 31 due to higher net sales realisation and an increase in turnover.

The company's net profit beat analysts' expectations of a 25 per cent increase for the quarter.

Net profit stood at Rs 1,935 crore as against Rs 1,471 crore in last year's corresponding quarter. Company's turnover for the quarter stood at Rs 10,756 crore, up 11.4 per cent over last year's corresponding quarter.

Looking forward, SAIL expects prices to rise. "The raw material cost for the industry has been rising continuously, driven mainly by coking coal and iron ore prices. Further hike in prices of these inputs is anticipated and steel prices will rise accordingly. A quarterly price hike of Rs 2,000-2,500 a tonne is expected in steel," said S K Roongta, the company's chairman.

On the renewal of the Chiria iron ore mines in Jharkhand, Roongta said the company is willing to set up a greenfield unit in the state if the state government makes allotment conditional to setting up a new unit. "Mecon has done a study and a site at Saraikela near Jamshedpur has been identified for a greenfield unit," he said.

SAIL has captive iron ore reserves but is almost fully dependent on imports for coking coal. To reduce its dependence on imports, the steelmaker, along with four other state-owned companies, has formed a special purpose vehicle that is exploring coal mining assets overseas.

Roongta said the SPV had identified coking coal reserves of 20 sq kms in Mozambique and is actively pursuing the matter, but declined to detail.