Corporates on a roll

India Inc's profits continued to grow at a scorching pace. Tuesday's stars were Gillette, with a 367 per cent rise, and Tata Telecom at 183 per cent.

Even slow-moving giants like SAIL and IPCL turned around this quarter. MRF and Castrol, however, disappointed.

SAIL nets Rs 255 crore

Steel Authority of India Ltd, the country's largest steel producer, today reported a net profit of Rs 255 crore (Rs 2.55 billion) for the first quarter of 2003-04, against a loss of Rs 309 crore (Rs 3.09 billion) in the same period of 2002-03.

This represents an improvement of Rs 564 crore (Rs 5.64 billion) in the company's bottomline.

This was the highest first quarter profit recorded by the company, a SAIL release said.

Its unaudited financial results for the April-June quarter of 2003-04 were taken on record by the SAIL board of directors at its meeting on Tuesday.

SAIL Chairman V S Jain said, "Our performance will improve."

SAIL reported a first quarter turnover of Rs 4,765 crore (Rs 47.65 billion) for 2003-04, which is 14 per cent higher than that of last year's.

The company attributed this growth to its aggressive marketing strategies, and said turnover had increased despite steel prices declining by around $45 and $78 in EU and CIS nations, respectively.

Its plan to export around 1 million tonnes of steel in 2003-04 had got off to a good start with first quarter exports of around 330,000 tonnes, the release said, adding that the 162 per cent growth in first quarter exports over the previous year was not only due to resumption of demand from China but also because of improved orders from Korea, Thailand, the EU, et cetera.

The four main integrated steel plants of SAIL stepped up production in view of the improvement in economic indices and industrial growth.

The plants together produced 2.56 million tonnes of saleable steel in April-June 2003, over 8 per cent higher than the 2.36 million tonnes produced in the corresponding period last year.

Around 60 per cent of crude steel (1.7 million tonnes) was produced through the energy-efficient continuous casting route. The period saw a jump in the output of high-value items like plates (40 per cent), tin plates (15 per cent) and CRNO (7 per cent).

Blast furnace productivity improved by 7 per cent, and energy consumption was lower by 1.8 per cent, the release informed.

"Through prudent financial management, SAIL further reduced its debts. Consequently, a saving of Rs 105 crore (Rs 1.05 billion) in interest payments was achieved. This trend is likely to continue," it added.

IPCL posts Rs 39 crore net

Indian Petrochemicals Corporation Ltd (IPCL), a Reliance group company, is back in the black. IPCL posted a net profit of Rs 39 crore (Rs 390 million) in the first quarter of the current financial year, against a net loss of Rs 6 crore (Rs 60 million) in the same period last year.

Net turnover increased 58.3 per cent to Rs 1,355 crore (Rs 13.55 billion) in April-June 2003 over Rs 856 crore (Rs 8.56 billion) recorded in the same period last year.

"We are satisfied with IPCL's performance in a difficult operating environment. The drop in margins has partly been compensated by the growth in production and sales volumes," Mukesh Ambani, IPCL chairman, said.

"The first quarter performance reflects the positive impact of measures introduced for cost reduction, productivity, savings in interest costs and efficiency gains. We are confident of a further improvement in the company's performance in the future," he said in a statement.

The Reliance group bought the government's 26 per cent holding in IPCL at Rs 231 a share in May 2002 for a total consideration of Rs 1,491 crore (Rs 14.91 billion). Subsequently, Reliance made an open offer for an additional 20 per cent stake.

A year after its privatisation, IPCL's operating profit for April-June 2003 is 16 per cent higher at Rs 245 crore (Rs 2.45 billion) over the same period last year.

The IPCL stock opened at Rs 119.25 and touched a high of Rs 124 before closing at Rs 120.95 on the Bombay Stock Exchange on Tuesday.

In a press release, IPCL pointed out that the increase in net turnover "reflects the impact of a 67 per cent increase in sales volume and a 9 per cent decrease in product selling prices."

During the first quarter of 2003, IPCL recorded an extraordinary expenditure of Rs 122 crore (Rs 1.22 billion) on account of a voluntary retirement scheme covering over 1,500 employees.

Its interest outgo was 32 per cent lower during the quarter at Rs 61 crore (Rs 610 million) due to the reduction in debt and interest cost management, the release added.