Tata Steel Profit Plunges 89% to 598 crore in Q1

Weak European demand and pressure on steel prices take a toll  Tata Steel, one of the world's top 10 steel producers, on Monday reported a sharp drop of 89% in its consolidated net profit at . 597.9 crore for the quarter ended June 30, hit by weak demand in Europe and pressure on steel prices. The profit in the corresponding quarter of the previous fiscal was . 5,346.5 crore.  The company's net sales went up marginally to . 33,547.8 crore in the April-June quarter from . 3,2925.7 crore in the same period last year. The audited results were in line with analysts' expectations who had predicted an 87% fall in Tata Steel's consolidated net profit.  Incidentally, the net profit in Q1 of 2011-12 had included an exceptional gain of . 3,900 crore due to stake sale in Riversdale for . 2,880 crore, sale of shares of Tata Refractories for . 440 crore and receipts of . 590 crore from TCP arbitration settlement.  While steel prices have seen significant decline recently, the impact of lower prices will be seen only in the second quarter of FY13. The company's European operations are expected to witness a marginal improvement in the coming quarter on back of lower raw material costs.