A worker carries coal in Mumbai, India ( Photographer: Dhiraj Singh/Bloomberg)

Tata Company That Just Clocked 124% Profit Growth Sees Challenges Ahead

Tata Sponge Iron Ltd., a company which witnessed a 124 percent rise in profit in the January to March quarter of financial year gone by, has two challenges to overcome, Managing Director, Sanjay Pattnaik said.

First, is the increase in raw material prices led by coal. Even over financial year 2017-18, raw material prices rose mostly because of rising coal prices. A repeat of that would lead to cost pressures for the company, Pattnaik said. “I expect coal prices to fluctuate.”

Second, is a logistics concern. “Avaliability of railway wagons is a big issue for us. We are incurring additional costs for movement of coal by road,” he said.

Tata Sponge Iron’s share price has risen 15.6 percent in 2018 compared to a 1.5 percent rise in the benchmark BSE Sensex Index.

Watch the full conversation here.

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