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Consolidated net profit in the quarter under review was Rs.3914.62 crore, up from Rs.2409.12 crore posted in the year-ago period (year-on-year or YoY rise of 62.49 percent).

During the same period, net sales rose to Rs.43,508.28 crore from Rs.31,162.27 crore (YoY gain of 39.61 percent).

The total income during Q1 of FY09 was Rs.43,560.96 crore, up from Rs.31,296.35 crore (YoY rise of 39.18 percent).

According to Tata Steel, the income of Corus and its subsidiaries constituted 74 percent of the consolidated total income.

During the quarter under review, total expenditure rose to Rs.37,625.66 crore, up from Rs.27,362.91 crore (YoY rise of 37.50 percent), mainly on account of higher prices of raw material (expenditure on raw material consumed during Q1 of FY09 was Rs.11,749.26 crore, up 57.84 percent from Rs.7443.76 crore in the year-ago period).

Tata Steel said its sales volume in India and Europe (including the UK) during the quarter under review rose 11.5 percent and 7.06 percent respectively.

Sales volume also rose in South-East Asia, with Natsteel (Singapore) and Tata Steel Thailand registering growth of 56.60 percent and 16.66 percent respectively.

According to Tata Steel, the growth in earnings was due to higher price realization in the international operations, higher volume and improved productivity.

"The company's performance was the best ever (when we include Corus)," Ratan Tata, chairman, Tata Group, told shareholders at the company's annual general meeting in Mumbai. Tata Steel bought Corus last year for nearly $13 billion, a move that makes the new entity the sixth largest steel maker in the world, producing 26 million tonnes of steel annually.

However, Ratan Tata warned that despite higher earnings, Tata Steel's outlook remained bleak. "With challenges of battling record raw-material costs, our profit margin will squeeze. Rising cost of raw materials could result in a recessionary trend for the industry," Tata said.

"In the immediate future, steel prices will be dictated by the level of iron ore and coking coal prices, which continue to rise unabatedly. Unfortunately, most of the iron ore resources are controlled by three powerful international mining companies. They control about 70 percent of the global iron ore and mineral resources whereas the 10 largest steel producers would account for only about 28 percent of the total global steel output," he said.

Unlike other international steel makers like ArcelorMittal and Posco that sell steel at international prices, Tata Steel has to hold steel prices in India due to government directive.

"The price will remain around the same level, though there could be a little bit of softening," B. Muthuraman, managing director, Tata Steel said. This is possible as Tata Steel's margins from its Indian operation are much better compared to its international operations as, in India, it sources its iron ore and a majority of its coal requirements from its own mines.

Meanwhile, in the wake of sharp rise in prices of raw material, Tata Steel is said to be looking to secure raw materials by acquiring iron ore, limestone and coal mines abroad.

"Demand for steel in the developing world will continue to be an important engine of growth. Internal demand for infrastructure and construction needs will continue to grow substantially in the years ahead in China, India and Brazil," Tata said, adding that the company is seeking to invest in captive raw material abroad to boost margins of its international operations like Corus.

"We are in talks to raise at least $1 billion through private equity (PE) transactions or a private placement of shares with institutional investors," a Tata Steel official said, adding that the money is likely to be used to fund the purchase of a coal or iron ore mine or part of one.

According to industry estimates, the consolidated entity has access to just a fifth of its iron ore needs and 15 percent of their coal requirements from its own fields.

ABOUT TATA STEEL

Established in 1907, Tata Steel has grown to become the world's 6th largest steel company with an existing annual crude steel capacity of 30 million tones after it acquired Anglo-Dutch steel maker Corus for nearly $13 billion. Asia's first integrated steel plant and India's largest integrated private sector steel company, Tata Steel is now the world's second most geographically diversified steel producer, employing over 82,000 people and with operations in 27 countries and commercial presence in over 50 countries.

Tata Steel completed 100 glorious years of existence on August 26, 2007 following the ideals and philosophy laid down by its founder, Jamsetji Nusserwanji Tata. The first private sector steel plant that started with a production capacity of 1,00,000 tonnes has transformed into a global giant.

Tata Steel plans to grow and globalize through organic and inorganic routes. Its 6.8 million tonnes per annum (MTPA) Jamshedpur Works plans to achieve 10mt capacity by 2010. The company also has three greenfield steel projects in the states of Jharkhand, Orissa and Chhattisgarh and proposed steel making facilities in Vietnam.

Through investments in Corus, Millennium Steel (renamed Tata Steel Thailand) and NatSteel Asia, Singapore, the Tata Steel has created a manufacturing and marketing network in Europe, South East Asia and the Pacific-rim countries. Corus, which manufactured over 20 MT of steel in 2008, has operations in the UK, the Netherlands, Germany, France, Norway and Belgium. Tata Steel (Thailand) is the largest producer of long steel products in Thailand with a manufacturing capacity of 1.7 MT. NatSteel Asia produces about 2 MT of steel products annually across its regional operations in seven countries.

Tata Steel, through its joint venture with Tata BlueScope Steel Limited, has also entered the steel building and construction applications market.

The iron ore mines and collieries in India give the company a distinct advantage in raw material sourcing. Tata Steel is also striving towards raw materials security through joint ventures in Thailand, Australia, Mozambique, Ivory Coast (West Africa) and Oman.

Exploration of opportunities in titanium dioxide business in Tamil Nadu, ferro chrome plant in South Africa and setting up of a deep-sea port in coastal Orissa are integral to the growth and globalization objective of Tata Steel.

Tata Steel is the flagship company India's most respected and second largest business conglomerate, the Tata Group, which has business interests that include steel, automobiles, software, telecommunications, hotels and consumer products.

The Tata Group reported revenues in 2006-07 of $28.8 billion, about 3.2 percent of the country's GDP, and a market capitalization of $80 billion. The group comprises 96 companies with over has 27 publicly listed enterprises and operates in more than 85 countries across six continents, employing over 350,000 people.