New Delhi: As Steel Authority of India Ltd (SAIL), the nation’s largest state-run steelmaker, announced a 72% surge in fourth-quarter earnings, it unveiled plans to continue growth with a new one million tonne heavy-beam plant in Bhilai.
With the plant, SAIL will become one of the few companies in the world and India’s first to make the so-called universal beams, used in high-rise and heavy bridge and structural constructions. Each will be 1,100 mm in depth, the largest of their kind. “At present, we are making beams that have a depth of up to 650mm, but no other company in the country is making 1,100 mm at present,” SAIL chairman S.K. Roongta said in an interview after the company’s annual board meeting.
Beating analysts’ expectations, net profit rose to Rs1,902 crore, or Rs4.6 a share, in the quarter ended 31 March, from Rs1,100 crore, or Rs2.67 a share, a year earlier, SAIL said on 21 May 2007. Sales rose 14% to Rs9,984 crore.
Profit boost: S.K. Roongta
Rising demand and China’s closure of obsolete steel plants have pushed up prices, helping SAIL achieve an average 55% profit growth in the previous three quarters.
For the year 2006-07, SAIL posted a net profit of Rs 6,202 crore. The company achieved all-time high revenues of Rs39,189 crore and highest ever profit before tax at Rs9,423 crore during the year.
“The outlook for steel companies is positive and there is confidence they will continue to show buoyant growth,” said U.P. Bhat, a fund manager at Canbank Mutual Fund, which owns shares of Steel Authority.
SAIL shares are the biggest gainers this year on India’s 50-share S&P CNX Nifty index. The company announced a final dividend of Rs1.5 a share.
On 21 May, SAIL’s shares rose 4% to close at Rs144.85 on the Bombay Stock Exchange.
Bloomberg contributed to this story.