Tata Sponge

Tata Sponge Iron Ltd, an associate company of Tata Steel which holds 51% stake, showed a decent set of numbers for Q3Fy13, with a 22% rise in net profit at Rs 20.58 crore. This jump came in thanks due to the surge in net sales, which rose 55% at Rs.196 crore.  The higher sales helped the company post better bottomline as operating cost was up 59%.

The company has secured a stay from the Delhi High Court challenging an order of the Coal Ministry to encash bank guarantee (BG) of Rs 32.50 crore against the delay in commissioning the Radhikapur coal block. The coal block was allocated to the company, jointly with Scaw Industries Ltd and SPS Sponge Iron Ltd. Due to the delays caused by these proceedings, the company has applied for extension of the normative date of production before the government and the application is still pending. The company worked at over 90% capacity and looking ahead, the company has stated that demand is fledgling and production could see some decline. Currently the macro factors are challenging but the company, as such, is sound, being zero debt and becoming a Tata Steel subsidiary does better its investor fancy.