Financial Performance

Essar Steel Limited (ESTL) registered a total income of Rs.1652.89 crore for the quarter ended June 30, 2005 compared to Rs.1327.74 crore in the corresponding period of the previous year registering a growth of 24.5%. EBIDTA for the quarter stood at Rs.538.86 cr. (Rs.487.61 cr.) a growth of 10.5%. Net profit grew by over 300% at Rs. 207.71crore (Previous year Rs. 50.44 crore), after providing for finance costs of Rs.108.30 crore (Rs.137.79 crore), depreciation of Rs. 98.17 crore (Rs. 101.04 crore) and a Provision for Deferred Tax , MAT & FBT of Rs.124.68 crores (Previous year Rs.59.49 crore).
Consolidated Results

As a consequence of the acquisition of Hy Grade Pellets Limited and Steel Corporation of Gujarat Limited, the total income consolidated entity stood at Rs. 1655.78 crore. EBIDTA for the quarter stood at Rs.600.17 cr. Net profit was Rs. 233.65 crore, after providing for finance costs of Rs.120.71 crore, depreciation of Rs. 108.09 crore and a Provision for Deferred Tax, MAT and FBT of Rs.137.72 crore

Commenting on the results, Mr. Prashant Ruia, Managing Director, Essar Steel said "The results have underscored the value we attach to technology, customer satisfaction and international standards of quality. This is especially true in light of current softening of prices, rising imports and firm raw material prices. Our plan for capacity enhancement and total integration is on course and will make the company retain its competitive edge in domestic and international markets."

Manufacturing

HR coil production for the quarter ended June 30, 2005 grew by over 16% to 6.46 Lakh tonnes (5.59 Lakh tonnes). Marketing
Total sales during the quarter registered a growth of 9% at 5.72 lakh tones as compared to 5.25 lakh tones in the corresponding period last year. Domestic sales stood at 3.83 lakh tonnes(3.52 lakh tonnes) and the Company exported 1.90 lakh tonnes (1.73 lakh tonnes) in the quarter. The Company continued its concentration on value addition and its focus on customized grades, and believes that this will give it a hedge against cyclicality in international markets.

New Products

In the quarter, the Company introduced Shot Blasted and Primer Coated steel plates which are ideal for use in the fabrication and ship building industries.

The Company also introduced a range of Hot Rolled Pickled and Oiled (HRPO) products, Cold Rolled products and galvanized products, which find applications in varied industries like automobiles and auto components, structural engineering, construction and ship building.

Acquisitions

During the quarter, the Company completed the acquisition of 51% stake held by Stemcor in Hy Grade Pellets Limited (HGPL) and 100% stake of Stemcor in Steel Corporation of Gujarat limited (SCGL).

These acquisitions have made Essar Steel a fully integrated steel maker with control over the entire operations-from iron ore to ready-to-market steel products. This has also enabled the Company to introduce a range of new products such as Hot Rolled Pickled and Oiled (HRPO) products, Cold Rolled products and galvanized products, which find applications in varied industries like automobiles and auto components, structural engineering, construction and ship building.

About Essar Steel

Essar Steel is the flagship company of the Essar Group and has a capacity of 3 million tonnes of steel per annum at its modern steel plant at Hazira, Gujarat, India. The Company is one of India's largest fully integrated steel manufacturers - from iron ore to ready-to-market products. Essar Steel is India's largest exporter of flat steel products and focuses on value added products and a high degree of customization.

About the Essar Group

The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors like Steel, Shipping, Power, Oil & Gas, Telecom, BPO and Constructions. The Group has an asset base of over Rs.20, 000 crore and employs over 4000 people.

Unaudited Financial Results for the Quarter from 1st April, 2005 to 30th June, 2005