New Delhi: Higher volume and cost reduction helped state-run steel giant SAIL register a record third quarter profit of Rs1,935 crore, against Rs1,471 crore in the corresponding period last year, a 32% increase.
The sales turnover during the quarter rose by 11.4% to Rs10,756 crore. The company netted its highest revenue for the first nine-month at Rs30,026 crore.
“Riding on the back of improved product mix coupled with substantial increase in production of special grade steel and cost reduction, SAIL has achieved this profitability,” its chairman S K Roongta said here.
Profit after tax shot up by 20% to Rs5,160 crore during April-December period.
Profit before tax was Rs2,922 crore, highest in any third quarter, Roongta said, pointing out that this was 31% higher than the same period last year.
SAIL achieved a record hot metal production of 11.3 million tons, 10.4 MT of crude steel and 9.6 MT of saleable steel during the first nine months of the current fiscal. Its plants operated at 121% average capacity utilisation in the third quarter, against 112% achieved in the same period last year, the SAIL Chairman said.
The steel giant further reduced its borrowings by Rs412 crore in the third quarter to Rs2,792 crore. With this, the PSU’s debt:equity ratio came down to the lowest level of 0.13:1 at the end of the third quarter, he said.
Seeking to allay apprehensions that a recession in the US economy could adversely affect growth of the Indian steel sector, Roongta said the driver of steel sector growth was Southeast Asia in general and China in particular, and hence such happenings in the US would not have any affect.
“Though demand in China may not continue to be robust, we will continue to grow by six-and-half per cent,” he said.
Warning that rising input costs were making steel production costlier, Roongta indicated steel prices in the country could head northward, and if prices rose globally, then India would not be an exception.
“We do not prefer to increase prices. But as a steel producer I am not happy to pay for higher raw material costs,” he argued.
He said getting at least 2 billion tons of iron ore reserve from the world-famous Chiria mines would be indispensable for SAIL for furthering its expansion plans in Jharkhand.
“We say that the ten leases, of which we are the rightful owners, be given to us. Beyond that who is being given what reserve, we are not concerned,” the SAIL Chairman pointed out.
The modernisation and expansion of Bokaro Steel Plant is slated to begin next month and SAIL has announced plans to set up a greenfield plant in the state.
He said SAIL was open for an out-of-court settlement to resolve the Chiria impasse and that the Jharkhand government will have to reciprocate on the matter.