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Business News/ Companies / SAIL Q3 net loss at Rs1,529 crore on low income, import surge
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SAIL Q3 net loss at Rs1,529 crore on low income, import surge

Steel Authority of India says domestic market continues to suffer from rising imports, particularly from China, Japan and Korea

A file photo of a Steel Authority of India Ltd’s plant in Durgapur, West Bengal. Photo: India PicturePremium
A file photo of a Steel Authority of India Ltd’s plant in Durgapur, West Bengal. Photo: India Picture

New Delhi: Lower sales on account of “huge surge in imports of low-priced steel" from countries including China saw steel giant Steel Authority of India Ltd (SAIL) log a massive 1,528.7 crore standalone net loss for the December quarter.

The country’s largest steel maker had reported a profit of 579.1 crore in the same quarter last fiscal. The total income of SAIL dropped 19.5% to 8,939.1 crore during the quarter as against 11,107.3 crore last fiscal.

Total expenses were marginally up at 10,779.7 crore during October-December as against 10,370.9 crore in the year-ago period. “The company incurred a net loss of 1,529 crore for the third quarter of 2015-16... primarily due to a 24% decline in net sales realisations over the corresponding period last year. Sales were adversely impacted by a huge surge in imports of low-priced steel," SAIL said in a statement.

Global steel prices have registered a steep fall over the last year to $280 from around $460, mainly due to a slowing Chinese consumption which is leading to oversupply of cheap steel into the market.

“Imports into India are at an annualised rate of 12 million tonnes, which is 20% up over a very high base of fiscal 2015 when these had surged 75% over the previous year," the company said.

The domestic market continues to suffer from the rising imports, particularly from China, Japan and Korea, at prices which are much lower than the domestic cost of production, affecting margins of steel producers in India, it added.

“The global scenario is very challenging and the demand-supply imbalance resulting in price adjustments is hurting the domestic steel industry," SAIL chairman P.K. Singh said. “We are focused on ramping up production from our new units and are adopting cost-efficient strategies to improve our NSR (net smelter return). The recent favourable policies announced by the government and its concerted efforts to enhance infrastructure spends in viable sectors will improve domestic demand and provide some relief to the Indian steel industry."

The company registered a growth in production of hot metal, crude steel and saleable steel in the third quarter of fiscal 2016 by 2%, 4% and 14%, respectively, over the preceding quarter. “SAIL registered a 6% growth in sales volume at 2.906 million tonnes over the previous quarter," it said.

The revenue from Bhilai steel plant stood at 3,292 crore while Durgapur steel plant chipped in with 1,435 crore. Revenue from Rourkela and Bokaro steel plants stood at 1,594 crore and 1,638 crore, respectively. PTI

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Published: 09 Feb 2016, 11:03 PM IST
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