Tata Steel Ltd has reported a near three-fold rise in its consolidated net profit at Rs. 12,321.76 crore for the year ended March 31, 2008, against Rs. 4,165.61 crore reported in the previous year. The company has become world’s sixth largest steel producer globally after the acquisition of Anglo-Dutch Company Corus last year.

Tata steel’s net sale has crossed the Rs 1-trillion mark. The company’s consolidated income jumped to Rs. 1, 32,110.09 crore in 2007-08 from Rs. 25,650.45 crore in the previous year. On a standalone basis, the net profit and income for the year was up 11 per cent each at Rs. 4,687.03 crore (Rs. 4,222.15 crore) and at Rs. 20,028.28 crore (Rs. 17,984.76 crore).
 
The price of the Raw material has increased tremendously since the month of March. However, steel makers were persuaded by the government in late April to hold prices for at least three months.

 According to the Analysts, Corus will be able to pass on the higher raw material costs to its consumers and this should bode well for the consolidated performance of Tata Steel.

Philippe Varin, CEO of Corus Group, said that the company has raised steel prices by nearly 230 euros per tonne in the past two months.

He added that Corus was successful in bringing down energy consumption and improving operating earnings.

Tata Steel managing director B. Muthuraman said the company would increase its return on invested capital to 30 per cent by 2012 and that it would exceed the target of $450 million in savings per year.

He said Tata Steel’s domestic production would go up to around 7 million tonnes by the end of this year and jump to 10 million tonnes over the next couple of years.

Tata Steel is also concentrating on acquiring raw material assets. The group has plans to “reorganize in the next six to 12 months for planned growth in raw materials and expansion in new markets.”

The long-term strategy for the company was to build a strong base in India and look for acquisitions in primary steel making countries rich in raw materials.

“India imported around six million tonnes of steel for consumption last year and this year imports could be 8-9 million tonnes, as there is no significant capacity addition. Even if the economy grows more sluggish than expected, there will be a demand-supply gap and this would propel prices.” Mr. Mathuraman said.