Feb 6 (Reuters) - Tata Steel, India's second-largest maker of steel by market capitalisation, reported a bigger-than-expected third-quarter profit on Friday as higher sales volumes helped cushion the impact from weak steel prices.
Consolidated net profit jumped to 26.89 billion rupees ($296.66 million) in the quarter ended December 31, from 3.27 billion rupees a year earlier.
Analysts' on average had expected profit of 24.26 billion rupees, according to data compiled by LSEG.
Jefferies analysts had expected Indian steel companies to report stronger volume growth in the October–December period, driven by capacity expansions, while Systematix Institutional Equities said that higher volumes would help offset pricing pressures for Tata Steel.
Its domestic production volumes for the quarter increased by 11.4%, while delivery volumes grew 14% year-on-year, driven by capacity utilisation at its plants at Kalinganagar and Jamshedpur.
This lifted the Tata Group company's total revenue from operations by around 6% to 570.02 billion rupees.
Steel prices, however, stayed under pressure for most of the third quarter as supply outpaced demand, dragging down flat product prices, analysts at Elara Capital said.
Prices have rebounded since December, helped by the government's safeguard anti-dumping duty, which is expected to support the sector in the near term.
Last month, India imposed a three-year import tariff on select steel products to curb Chinese imports, replacing a 12% duty introduced in April for 200 days.
The longer duration is seen as offering greater certainty and protection for domestic producers, according to Sunny Agrawal, head of fundamental equity research at SBICAPS Securities.
Core profit, or earnings before interest, taxes, depreciation, and amortization (EBITDA) for Tata Steel's India operations grew nearly 5% to 82.91 billion rupees.
Rival steelmaker JSW Steel in January beat third-quarter profit estimates on higher sales volumes.
