Calcutta, Feb. 13: Tata Steel reported a 26 per cent rise in net loss at Rs 763 crore in the third quarter, dragged down by weak European operations.
The second straight quarterly loss of the world's seventh-largest steel producer shocked the Street, which was expecting a better performance from both the Indian and European operations. The group had posted a net loss of Rs 602.67 crore in the corresponding period a year ago.
Tata Steel's turnover was down 3 per cent at Rs 32,107 crore in the December quarter compared with Rs 33,103 crore in the same period last year.
Even as the Indian operation made a profit of Rs 1,046 crore in the third quarter, it was down 26 per cent from Rs 1,421 crore a year ago.
Tata Steel managing director H.M. Nerurkar said the focus now would be to build the 3-million-tonne plant at Kalinganagar, Odisha, and expand its Jamshedpur unit.
"The Indian operations performed steadily despite the overall weak steel demand in India. Our ability to achieve sequential volume growth in a difficult market reaffirms the strength of our distribution channels and customer orientation strategy. The government's reform initiatives and the reduction in interest rates should help boost steel demand," he said.
Karl-Ulrich K�hler, managing director and CEO of Tata Steel Europe, pinned his hope on the restart of a blast furnace at Port Talbot, UK.
"Sliding demand was a problem for European steel makers in 2012 and this was reflected in our December quarter deliveries. With the restart of the furnace at Port Talbot this week, we have regained our operational and logistical flexibility," K�hler added.
Bhavesh Chauhan, research analyst with Angel Broking, said, "Tata Steel posted disappointing results with both sales and net profit below our expectations. Its India operations' PAT came in at Rs 1,046 crore compared with our estimate of Rs 1,400 crore. European operations posted a loss of $78 at EBITDA level. We expect higher volumes to come from the Indian operations during 2014-15. Also, inexpensive valuations make us positive on the stock at current levels."
The Tata Steel stock closed at Rs 376.15 on the BSE, down 2.18 per cent, even as the result came after market hours.