Tata Sponge Iron 's third quarter net profit fell 32 percent year-on-year to Rs 16.5 crore on account of weak operational performance and slower growth in revenue.
The bottomline was supported by power segment while iron ore ruined the profitability.
Total income from operations grew 8.4 percent to Rs 215.1 crore in the quarter ended December 2014 compared to Rs 198.4 crore in the year-ago period.
There was a pressure on realisations during the quarter as international iron ore prices were at multi-year lows. Iron ore sourcing was also a problem as Tata Steel iron ore mines had their own issues. The company gets iron ores from Tata Steel .
Operating profit of the company plunged 56 percent year-on-year to Rs 17.87 crore and margin declined 1200 basis points to 8.3 percent in the quarter gone by. Cost of raw material jumped 24 percent on yearly basis to Rs 171.2 crore during the quarter.
Sponge business revenue climbed 10 percent Y-o-Y to Rs 204.2 crore with EBIT (earnings before interest and tax) falling 100 percent to 1 lakh (from Rs 26.92 crore). Power business grew 43 percent to Rs 24.5 crore with EBIT spiking 86 percent to Rs 18.4 crore in the quarter ended December 2014.
Source: Money Control
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