NEW DELHI (Reuters) - Steel Authority of India, one of India's leading steelmakers, reported a smaller-than-expected 28 percent drop in quarterly net profit, but cautioned that any "dramatic upturn" in global demand for the alloy was unlikely.
The state-run firm, which has the largest steel making capacity within India, plans to borrow 40 billion to 50 billion rupees ($830 million-$1 billion) this fiscal year to meet its capex plans, Chairman S.K. Roongta said, adding that additional equity issue was also another option the company was looking at.
"We are considering that," Roongta said of the additional equity issue, without giving details.
The steel industry, recognised as a broad gauge of an economy's strength, has globally seen demand tumble, driven by the weakness in key automotive and construction sectors.
"We must reckon the fact that even now globally capacity utilisation is quite low. As the demand picks up, there is enough capacity," Steel Authority's Roongta said.
"We are not going to see any situation where demand will be more than supply."
Prices are, however, not under pressure, he said.
Steel Authority's production and sales in the July month is up about 10 percent from a year ago and it will try to maintain the trend for the quarter ending September, Roongta said.
He expects raw material prices to be sequentially lower in the September quarter.
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