Steel Authority of India's (SAIL) net profit in fourth quarter grew marginally by 1% to Rs 453 crore from a year ago quarter due to rise in total cost, interest outgo and sharp fall in other income.
The state-owned company's net sales for the quarter ended March grew by 9.7% to Rs 14,987 crore from year ago following rise in steel volumes. During fourth quarter, production of saleable steel at 3.13 million tonne (MT) was up by 4%.
The steel giant's total expenses rose to Rs 12,805 crore from Rs 11,600 crore in a year ago period. Interest outgo also was up 31% on year at Rs 312 crore. Other income came down sharply from Rs 255 crore to Rs 175 crore.
The company continued to march ahead on its modernisation and expansion programme (MEP) and until March 2014, cumulative expenditures of Rs 53,270 crore has been made, it said in a statement. During FY 2013-14, projects worth around Rs 6,500 crore were operationalised which resulted in a capacity addition of 2.5 MT per annum hot metal capacity in 2013-14.
"The thrust on development of infrastructure and industry would provide more avenues for steel consumption. This certainly augurs well for the Indian steel industry. SAIL's focus in the current fiscal would be to complete the balance facilities under our Modernisation & Expansion programme and ramp up the production from the new units in the shortest possible time," said chairman CS Verma, expressing optimism for future.
For FY14, the steel firm registered an increase of 20.6% in net profit to Rs 2,616 crore, up from Rs 2,170 crore in FY13, on a standalone basis. Sail's gross turnover at Rs 51,866 crore in FY14 increased over 5%, up from Rs 49,350 crore in FY13.
Most analysts were disappointed by the earnings. "Ebitda of the company for fourth quarter was 20% less than our expectation, while realisations were also down by 2%," Girirraj Daga, senior analyst with Nirmal Bang brokerage, said.
"It seems that the company has done price negotiations for many contracts in past one month. It seems during the entire UPA II period they have not negotiated any contracts. Their provisional prices have come down significantly because of this," Daga added.