Tata Steel said its net profit on a standalone basis for the quarter ended December 31 more than doubled to Rs 1,190 crore against Rs 466 crore a year ago. The company’s profit grew on the back of higher demand for steel from automakers and builders. Sales for the company grew by 33 per cent to Rs 6,307 crore in the period.
The company also said it had formed a joint venture (JV) with Japan’s largest steel producer, Nippon Steel, to set up an automobile steel venture in India. Tata Steel will have 51 per cent stake in the JV, which will invest about Rs 1,800 crore to set up a plant in the Indian company’s Jamshedpur complex.
The JV will set up a continuous annealing (the process of heating a metal and letting it cool slowly to harden it) and processing line, with a capacity of 6,00,000 tonnes. Nippon Steel will transfer its technology for producing high-grade cold rolled sheet for automotive application.
“Both companies will continuously discuss further collaboration in other fields, such as automotive CGL or up-stream processes ,” said Tata Steel in a statement. The companies will target the conclusion of the JV deal by June 2010 and start operations before March 2013.
Steel consumption in India grew 7.7 per cent in the first nine months of the current financial year, as demand from the car and construction companies grew along with the government’s spending on road and infrastructure.
The company’s sales volume in the quarter grew 49 per cent to 1.6 million tonnes. The stock of the company was up 4.8 per cent to Rs 585.5 a share on the Bombay Stock Exchange on Thursday following the announcement of the result and the JV. Sensex, the benchmark index of the exchange, was up by 0.1 per cent to 16,306.8 on the day.
