Tata Steel has posted a whopping 642.62 per cent rise in net profit for the second quarter to Rs 203.18 crore from Rs 27.36 crore in the previous corresponding quarter.
The spurt in net profits was propelled by a 14.8 per cent jump in net sales to Rs 2,207 crore from Rs 1,932.93 crore.
Though inventories stood at over Rs 55 crore, the bottomline improved on account of a marginal reduction in raw material consumption, despite higher sales, and an almost 20 per cent drop in interest costs to Rs 76.41 crore.
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As a result, operating profit margins improved during the quarter to 23.47 per cent from 14.8 per cent last year. The company has been on a stringent cost reduction drive for the last four years.
The expenditure on employee separation increased in the second quarter to Rs 84.22 crore from Rs 57.61 crore, but for which the net profit would have been even higher.
Managing director B Muthuraman attributed the performance to the better price realisation arising from the several rounds of price increases this year, the improved product mix with more value-added products and increased sales volumes.