Kolkata, Oct 28 (IANS) Speciality steel and wire rope manufacturer Usha Martin posted a net profit of Rs.14.65 crore in the second quarter this financial year, down from the Rs.41.85 crore it earned in the corresponding period last fiscal.
“The slow and uncertain process of global economic recovery and volatility in raw material prices continue to affect product volumes and margins,” said company managing director Rajeev Jhawar here Wednesday.

“Standalone sales realisations were down 26 percent,” Jhawar told reporters.

The company’s operating profit margin dropped to 17 percent compared to 22 percent logged in the corresponding period last fiscal.

According to Jhawar, the sharp drop in steel prices over the past year affected the company’s results.

Steel, which cost about Rs.47,000 a tonne in the second quarter last fiscal, is now ruling at Rs.29,000 per tonne, a drop of about 30 percent.

Jhawar said that taking the commissioning of additional capacity into consideration, the company expected to touch Rs.900-950 crore revenue by fourth quarter this year.

Demand was also picking up, he said, maintaining that the auto sector was doing well.

“We are currently de-watering our mines and expect the coal to start reaching us in the next six weeks. This and the commissioning of our 30 MW captive power plant would significantly improve our operating margins,” Jhawar said.

The margins will be around 21-22 percent from the fourth quarter after the Rs.2,100-crore expansion programme is completed, he said, adding that the upgrade would help Usha Martin raise its annual steel making capacity to 900,000 tonnes by March.

At present, the output per quarter is about 80,000 tonnes.

Usha Martin has manufacturing facilities at Ranchi, Jamshedpur and Hoshiarpur in the country, apart from Britain, Thailand, the United Arab Emirates and the US.