Backed by higher captive raw material utilisation, steel wire major Usha Martin Ltd today posted consolidated net profit of Rs 22.85 crore for the second quarter ended September 30.
The company had registered a net loss of Rs 62.69 crore in the same period last year.
Usha Martin Ltd (UML) reported an increase of 12% year-on-year in net sales to Rs 938.98 crore in the quarter under review.
"We have produced our metalik items used as raw material on our own instead of buying from open market which helped in jump in profit in steel segment," UML Managing Director Rajeev Jhawar said.
The steel division registered a profit of Rs 60.44 crore in the quarter, almost 160% higher from Rs 22.96 crore in the same period last year, the company said.
"We have also raised the production of coal to 2,77,068 tonne from 1,16,631 tonne and iron ore production to 2,85,235 tonne from 2,39,319 tonne over the last one year, which added to saving cost," he added.
Iron ore and coal are the main raw material for Usha Martin which produces speciality steel and steel wire rope.
The city-based company hopes to maintain at least 18% EBIDTA margin.
Meanwhile, UML has sought one year extension from inter ministerial group on coal allocation to begin production at its coal block at Lohori, Jharkhand.
"We had made a presentation to IMG and sought time till September 2013 to start production. The original date to start production was July 2012, but it was delayed as the CCIL (Central Coal Field) took more than 3 years to transfer the mining rights to us. Though there is no official communication but we hope get this time," Jhawar said.
The 9.8 million tonne reserve coal block came under the scanner of IMG in the recent months as it failed to start the development in time.
