Vizag Steel Plant net up 30%

State-owned Visakhapatnam Steel Plant (VSP) has registered about 30 per cent growth in net profits during the fiscal ended March 31, 2005, as compared to previous year.

During 2004-05, the company's gross profit stood at Rs 3,003 crore. Its net profit was Rs 2,008 crore as compared to the net profit of Rs 1,547 crore earned in the previous fiscal.

During the first quarter of the current fiscal, the steel plant reported a 41 per cent growth in gross profits at Rs 489 crore as compared to the corresponding period of last fiscal.

"We were able to cross the last fiscal turnover of Rs 8,000 crore despite a drop in steel prices. However, our margins have come down marginally," Y Siva Sagar Rao, chairman and managing director of VSP, told mediapersons here on Monday.

The company plans to wipe out its accumulated losses by next September.

In the current year, VSP may have to pay up to Rs 900 crore as corporate tax, which might see our net profits marginally down in the current fiscal, Rao said.

"We are anticipating good demand for our products in the coming days, and that's why we have decided not to cut the prices further," he said. VSP has reduced the prices of its products by about Rs 3,700 per tonne.

However, due to increase in the prices of raw material, the company's inputs cost was raised to Rs 3,500 on each tonne of steel produced.

"We have to stick to the present prices to run the company. So there is hardly any possibility of further hike in the current steel prices of VSP products," Rao said. To increase profitability, the company is on a cost-cutting drive, he said.