SAIL likely to incur loss this fiscal

CALCUTTA, December 28: The state-run Steel Authority of India Ltd (SAIL), one of the navratna firms, is heading for a loss after being out o...

CALCUTTA, December 28: The state-run Steel Authority of India Ltd (SAIL), one of the navratna firms, is heading for a loss after being out of losses for over a decade, senior company officials said.

Although SAIL reported a profit of Rs 48.53 crore in the first half of the current fiscal, the gloomy market situation is leading the steel major into losses and financial crisis, sources said.

With a lull in infrastructure and construction industries, new capacities being commissioned and dumping by east European countries, the steel market is extremely sluggish. Contrary to the normal trend in earlier years, but similar to the situation last year, sales in the second half of the financial year have been alarmingly low.

Company sources said its stock stands at 1.4 million tonnes. The production of hot-rolled (HR) coils is more than what the country can absorb, and HR coils, which form a big chunk of SAIL’s stocks, are just deadstock that may have to be disposed of with high rebates. Sail was looking forward to high sales in the last quarter of the year, but with elections round the corner, the steel market is likely to face a near crash, observers say.