Mumbai: Steel Authority of India Ltd (SAIL), the country’s top producer, booked a loss for the sixth straight quarter, almost in line with analyst estimates.
The company lost Rs730 crore ($108 million) in the three months through September compared with a shortfall of Rs1,110 crore a year ago, the company said in a statement on Thursday. That compares with Rs760 crore estimated by 14 analysts in a Bloomberg survey. Sales climbed about 20% to Rs12,430 crore.
India has tightened curbs on cheaper imports from countries including China as domestic mills ramp up production on expectations that Prime Minister Narendra Modi will boost spending on infrastructure, roads and power. Modi’s move last month to scrap higher denominated currency may hurt local demand, limiting suppliers’ scope to increase prices, according to Jefferies India.
“The company is certain that it will be able to improve its physical and financial performance in future,” because of government measures to boost demand, efforts to reduce costs and improvements in productivity, SAIL said in a statement.
SAIL joins Tata Steel Ltd in posting a negative result for the period partly on weaker product prices and as Tata’s operations in the UK remained a drag on earnings, while the nation’s second-largest producer JSW Steel Ltd reported a third straight profit on record output.
Shares of SAIL gained 3% to Rs53.55 in Mumbai on Thursday before the earnings. The stock has climbed 11% this year, after plunging 41% in 2015, as government measures curb imports and prospects for domestic demand improve.
The mill is spending Rs4,000 crore this year on increasing capacity by 43% to 21.4 million metric tons by 2018, part of a longer term goal of achieving 50 million tons in the next decade. Bloomberg