Calcutta, Nov. 6: Specialty steel and wire rope maker Usha Martin has registered a consolidated net profit of Rs 22.85 crore for the second quarter ended September 30 on the back of higher indigenous production of its key raw materials such as coal and iron ore.
The company suffered a consolidated net loss of Rs 62.69 crore in the corresponding period a year ago.
Consolidated net sales for the quarter stood at Rs 938.98 crore against Rs 827.58 crore in the same period previous year.
"This year we could substantially reduce the raw material costs by increasing our own production of thermal coal and iron ore. However, demand has been poor and offtake has been low particularly because of the slowdown in the automobile sector," Rajeev Jhawar, managing director of Usha Martin, said.
"We are expecting better volume and stable margins in the second half of the fiscal as demand starts to pick up," he said.
Net sales for the first half of the fiscal stood at Rs 1,785.07 crore against Rs 1,590.13 crore in the same period a year ago.
Net profit for the six-month period was Rs 26.32 crore against a loss of Rs 37.02 crore.
Coal production in the second quarter increased to 115,212 tonnes against 24,440 tonnes, while iron ore production increased to 324,005 tonnes against 266,033 tonnes over the same period a year ago.
The city-based company hopes to maintain at least 18 per cent EBIDTA margin.
Jhawar said the company was looking to develop the Lohari coal block at Jharkhand after the inter-ministerial group on coal blocks had in September recommended deduction of a bank guarantee for failing to develop the block in time.
"We had made detailed presentation to the IMG and we are hoping to develop the mine by the end of next year," he said.
The block has a reserve of 9.8 million tonnes.