Q1 Results: Low Prices, Weak Demand Hurt Tata Steel’s Profitability 

Lower prices and weak demand dragged Tata Steel Ltd.’s profit to its lowest since December 2016.

“The steel sector is facing significant headwinds which has affected spreads and overall profitability,” TV Narendran, chief executive and managing director of Tata Steel, was quoted as saying in a media statement. “Increased government spending and efforts to address the liquidity crunch should help revive demand and steel prices in India in the second half of the year.”

Another problem for India’s oldest steelmaker during the quarter was the collapse of a planned joint venture with Thyssenkrupp AG that would have helped it transfer some of its debt to the European unit. Though it’s not looking for a partner anymore, it plans to pare debt through free cash flows and sale of non-core assets.

Shares of Tata Steel closed 4.75 percent lower before the results announcement compared with a 0.7 percent drop in the benchmark BSE Sensex.