Thanks to strong output, state-run steel maker Steel Authority of India Ltd (SAIL) on Tuesday reported a three per cent rise in stand-alone net profit at Rs 1,577 crore for the quarter ended March 31, compared with Rs 1,531 crore in the year-ago period.
Net sales of the company were up 12.17 per cent at Rs 15,079 crore in the quarter, against Rs 13,339 crore in the corresponding period a year earlier. However, the company’s net profit for 2011-12 fell 28% to Rs 3,543 crore on the back of higher input costs, amounting to over Rs 4,000 crore.
“The effect of input price increase, amounting to over Rs 4,000 crore, mainly of imported coking coal with average prices rising to $288 a tonne in FY12 from $213 the previous year, was compounded by the volatility in dollar-rupee valuations, carrying an adverse impact of around Rs 900 crore,” the company said in a release.
SAIL reported a stand-alone gross sales turnover of Rs 50,348 crore for 2011-12, up seven per cent over the previous year’s Rs 47,041 crore.
“SAIL’s turnover crossed the Rs 50,000-crore mark during a year in which the global economy faced many challenges. With 2012 having begun on a very positive note for us, and our strategic initiatives in several areas taking firm shape, our outlook is bright,” said CS Verma , chairman, SAIL.
Analysts, however, said the rupee depreciation might make things difficult for the company.
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“As the rupee is depreciating, the April-June quarter might prove to be difficult. Otherwise, operational parameters of the company are fine, as it has crossed the Rs 50,000-crore turnover for the first time,” said Jagannadham Thunuguntla, strategist & head of research, SMC Global Securities Ltd.
The focus during the current year would be on completing the ongoing modernisation and expansion projects to give SAIL the readiness to meet the projected growth in steel demand during the 12th Plan period and beyond, he added.
Total expenditure of the steel maker rose 19.86 per cent to Rs 12,210 crore in the January-March quarter. Raw material costs alone accounted for over 51 per cent of the expenditure at Rs 6,232 crore, the company said.