SAIL Net profit Reduced Due to Less Demands

The story at Steel Authority of India Ltd (SAIL) is not very different. The largest PSU steel unit of India and Tata Steel, the largest private sector steel unit, both have shown a drop in their profitability’s.

It got down the cost of coking coal consumption by improving coal dust injection by 14% and used tar as an alternate fuel. Reduction in coke rate by over 2 % and energy consumption by 4 % during the year and several other cost efficiency measures, resulted in savings of about Rs. 275 crore during the quarter.

For the April-December nine-month period, the public sector steel giant posted its highest turnover of Rs 35,674 crore, up 18.8 per cent over the corresponding period last year. However, the net profit for the period went down to Rs 4,688.13 crore, marking a fall of 9.1 per cent.

For the steel sector to start showing signs of improving, firstly demand needs to takeoff. With demand from sectors like automobiles and construction still on the decline, in the midst of the global economic slowdown, it is expected that only by the second half of FY10 will economic growth pick up. And it is only then that the steel sector would also take off from this current slump. thanks