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BW Businessworld

Tata Steel Q1 Net Nearly Doubles On Lower Costs

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Tata Steel Ltd's quarterly profit nearly doubled as costs at India's top steelmaker by market value fell sharply, making up for a dip in sales.

Net income rose to Rs 1139 crore from Rs 598 crore a year earlier.

Net sales fell 3 per cent to Rs 32,805 crore due to lower prices in the April-June quarter.

Two-thirds of Tata Steel's 27 million tonne annual capacity is in Europe, and Chairman Cyrus Mistry said in June that volatile raw material prices and weak demand in key markets would be "challenging" for the company over the next two years.

A day before announcing its first quarter numbers, Tata Steel shares zoomed 8.29 per cent to Rs 236.55 amidst negative estimations. In the morning, analysts predicted that the balance sheet would be hit by foreign exchange losses and lower realisation at its European and Indian units. The European division, which reported record losses of £846 million and £1.2 billion in the last two financial years, is yet to recover from worsening macroeconomic environment and shrinking demand in the continent.
But a section of market analysts expected the European division to surprise everyone on the margins front.

Read Also: Tata Steel Shares Surge On Eve Of Q1 Results

(BW Online Bureau & Agencies)