Financial Performance

Essar Steel Limited (ESTL) has reported a growth of 48% in its total income, which stood at Rs. 2827 crores for the Quarter ended June 30, 2007 (compared to Rs. 1904 crores in the corresponding period last year). At Rs. 642 crores, the EBIDTA registered a growth of 62% for the Quarter (compared to Rs. 396 crores in the corresponding period last year).

Net profit was up by 462% at Rs. 231 crores (compared to Rs. 41 crores in the corresponding period last year), after providing for:

i) Finance Costs (net) of Rs.93 crores (Rs.181 crores in the corresponding period last year) including an exchange gain of Rs.114 crores.

ii) Depreciation of Rs. 187 crores (Rs.149 crores in the corresponding period last year) and

iii) Provision for Deferred Tax, MAT and FBT of Rs.130 crores (Rs.22 crores in the corresponding period last year).

Operational Highlights

Production
The production for the quarter ended June 30, 2007, grew by over 18% to 8.33 lakh tonnes (compared to 7.06 lakh tonnes in the corresponding period last year).

Total sales
Total sales during the quarter grew by 31% to 7.99 lakh tonnes (compared to 6.11 lakh tonnes in the corresponding period last year).

Domestic sales: Domestic sales stood at 5.48 lakh tonnes (compared to 4.37 lakh tonnes in the corresponding period last year).

Retail: The Company's retail initiative has received encouraging response from the customers. Currently, the Company has 82 retail outlets under the brand "Essar Steel Hypermart". Sales at the Hypermarts accounted for 20% of total retail sales. The retail sales stood at 1.1 lakh tonnes.

Exports: The Company's exports registered a growth of 44% at 2.51 lakh tonnes in the quarter (compared to 1.74 lakh tonnes in the corresponding period last year).

Essar Steel enjoys leadership position in niche segments such as API, Pre-Engineered Buildings, Auto and HSLA. Essar Steel's product portfolio now addresses the high value and discerning customers in the automotive, white goods, construction, general engineering and shipbuilding industries. The Company has been able to move up the value chain and add an enviable portfolio comprising leading Indian and international customers.

About Essar Steel
Essar Steel is the largest integrated producer of steel in Western India with a capacity of 4.6 million tonnes per annum. It is also India's largest exporter of flat steel products. It has manufacturing facilities at Hazira, Gujarat, a pelletisation plant at Visakhapatnam, and a iron ore beneficiation plant at Bailadila, Chhattisgarh. All the facilities use state-of-the-art technology and are supported by an end-to-end infrastructure setup, including captive power and oxygen plants, pipelines and port facilities.

About Essar Group
Essar Group is a large business corporation with a balanced portfolio of assets straddling the manufacturing and services sectors: Steel, Energy, Power, Communication, Shipping & Logistics, and Construction. EGL, through its six sectoral holding companies, has an asset base of over USD 10 billion (INR 410 billion) and employs 20,000 people worldwide. The Company has operations and investments in India, Canada, North America, Africa, the Middle East, the Caribbean and South East Asia. Recently, it acquired Algoma Steel of Canada, which has a steel manufacturing capacity of 4 mmtpa.

Unaudited Financial Results for the Period from 1st April, 2007 to 30th June, 2007