Financial Performance

Essar Steel Limited (ESTL) registered a growth of 23% in total income at Rs.2562.85 crore for the quarter ended September 30, 2007 compared to Rs.2081.58 crore in the corresponding period of the previous year. The net profit for the quarter under review was Rs.152.01 crore( Rs. 154.34 crore) after providing for Finance Cost at Rs.159.96 crore (Rs.136.86 crore), Depreciation at Rs. 186.40 crore (Rs.149.01 crore), Provision for Fringe Benefit Tax at

Rs.2.38 crore (Rs.1.13 crore), Deferred Tax at Rs. 90.17 Crore (Rs. 78.81 crore), Provision for current Tax at Rs. 19.43 crore (Rs. 7.06 crore (Credit))

Essar Steel Limited (ESTL) registered a growth of 35% in total income at Rs.5128.21 crore for the half year ended September 30, 2007 compared to Rs.3801.81 crore in the corresponding period of the previous year. EBIDTA rose by 35% at Rs. 1252.07 cr. (Rs.928.65 cr.). The net profit for the period under review registered a growth of 96% at Rs.383.07 crore( Rs. 195.47 crore) after providing for Finance Cost at Rs.253.32 crore (Rs.317.54 crore), Depreciation at Rs. 373.49 crore (Rs.298.20 crore), Provision for FringeBenefitTaxat Rs.3.80 crore (Rs.1.91 crore), Deferred Tax at Rs.189.44 Crore (Rs. 93.94 crore), Provision for current Tax at Rs. 48.95 crore (Rs. 1.22 crore credit)

Manufacturing

The production of hot rolled coils steel increased by 14% to 7.80 lakh tonnes for the quarter ended September 30, 2007 as compared to 6.86 lakh tonne. in the corresponding period of the previous year.

The production for the half year ended September 30, 2007 registered a growth of 16% at 16.13 lakh tonnes (13.92 lakh tonnes).

Marketing

Total sales registered a growth of 19% at 8.27 lakh tonnes for the quarter ended September 30, 2007 as compared to 6.92 lakh tonnes in the corresponding period of the previous year.

Total sales for the half year ended September 30, 2007 registered a growth of 25% at 16.26 lakh tonnes (13.03 lakh tonnes)
Apparent consumption in the country grew 11% y-o-y in Q2 of this year and this growth rate is expected to increase going forward on the back of renewed activity in construction, automotive & energy

In order to take advantage of rising domestic demand, Essar Steel focused on the domestic market. The exports focused only on value added segments and products.

The domestic sales registered a growth of 54.75% at 6.19 lakh tonnes for the quarter as compared to 4 lakh tonnes in the corresponding period of the previous year. The export sales stood at 2.08 lakh tonnes (2.92 lakh tonnes)

The Essar Steel Hypermart clocked a sales of 1.3 lakh tonnes for quarter ended September 30, 2007 accounting for 21% of total domestic sales. .

About Essar Steel

Essar Steel, part of Essar Steel Holdings Limited, 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 Steel Holdings Limited (ESHL)

ESHL is a global producer of steel covering India, Canada, USA, the Middle East and Asia. It is a fully integrated flat carbon steel manufacturer - from iron ore to ready-to-market products - supplying highly discerning customers in the automotive, white goods, construction, engineering and shipbuilding industries. With a current capacity of 8 million tonnes, Essar’s expansion in India, Asia and North America will see capacity rise to 20 to 25 million tonnes by 2012.

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. Essar Group has an enterprise value of over USD 20 billion (INR 800 billion) and employs 20,000 people worldwide. The Group has operations and investments in India, Canada, North America, Africa, the Middle East, the Caribbean and South East Asia.

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