Steel Authority of India Ltd's September quarter profits
were dented by high input costs and a weak rupee in a sluggish market. The
company is, however, bullish on the demand pick-up in the second half of the
current fiscal.
Chairman and Managing Director, Mr C.S.Verma believes that
the rush to achieve targets on various projects in the terminal year of the
12th Five Year Plan would trigger demand for steel in the remaining period of
current fiscal.
Commenting on the sustainability of the recent hikes, he
added, “We have increased prices by Rs 1,000 a tonne in the middle of October
after a gap of almost eight months as input prices have gone up. We had good
sales in October and the same price levels continue to prevail. The rupee has
depreciated by more than 15 per cent and as a result, steel imports are
virtually nil in the country. There is a slight mismatch in demand and supply
as private sector units are facing issues with raw material supplies. We hope
to do good business in the second half.”
Reflecting his confidence about the demand pick up in the
rest of fiscal, he also added, “Historically, we have seen a brisk demand in
the second half for the last five years. We are seeing a demand pick up. We are
operating with one of the lowest stock levels and expect demand from all
sectors. This is the terminal year of the 11th Five Year Plan and there will be
a rush to complete targets on various projects that will trigger spending.
Typically, the first year is a lean period and the last year of a five year
plan is a brisk period. We are witnessing demand from construction,
infrastructure and road among others.”
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