BENGALURU (Reuters) – Steel Authority of India (SAIL) reported a lower third-quarter profit on Monday, as higher imports led to a drop in both volume sales and prices.
The company’s consolidated net profit fell 22% year-on-year to 4.23 billion rupees ($51 million) in the three months to Dec. 31.
India’s steel imports rose to a five-year high during April-December, turning the country into a net importer of finished steel, amid a spurt in economic activity and a revamp of infrastructure by the government in a pre-election year.
However, that created a dearth of opportunity for domestic companies and, according to analysts, led to SAIL’s sales volume taking a hit. The imports-fuelled supply boom also led to lower prices.
That resulted in SAIL’s revenue from operations dropping nearly 7% to 233.49 billion rupees in the quarter.
Revenue from its Bhilai steel plant, which contributes to about a third of total revenue, fell 12%.
Tata Steel’s revenue also fell in the quarter but was mitigated by a drop in costs.
SAIL’s total expenses also fell, with the nearly 7% decline led by a 4% decrease in raw material costs as it switched to using cheaper Russian coking coal as Australian prices jumped 50%. ($1 = 82.9780 Indian rupees)
(Reporting by Manvi Pant and Varun Vyas in Bengaluru; Editing by Savio D’Souza)
