Tata Steel Ltd,Indias largest steelmaker by market value,swung to a loss in its fourth quarter,hit by weak demand in Europe,its top market and production region.
The January-March net loss was Rs 6,529 crore,compared with a Rs 433 crore profit a year earlier.
The company is under pressure from investors to cut costs and idle or sell factories,especially its older plants in Britain,to turn around its loss-making European operation.
Two thirds of Tata Steels 27 million-tonne annual capacity is in Europe. However,demand there has fallen by almost a third since 2007,largely because of economic weakness in the region,forcing Tata Steel to write down goodwill and assets by $1.6 billion in the past financial year.
Europes economic deterioration last year reversed the modest recovery in European steel demand that had been going on since 2009 and our deliveries fell as a consequence, said Karl-Ulrich Koehler,chief executive of Tata Steel Europe. The severely depressed conditions in Europe are expected to continue over the short to medium term,a company statement said.