India's Tata Steel, the world's seventh-largest steelmaker, said Friday quarterly net profit plunged 90 percent from a year earlier, hit by high input costs and falling demand in its key European market.
Tata Steel reported consolidated net profit slid to 4.33 billion rupees ($80 million) for the three months to March from 41.76 billion rupees in the same period a year earlier.
Sales rose by just over one percent to 339 billion rupees from 338 billion rupees reported a year go.
"Steel demand in emerging markets increased but it dropped in Europe towards the end of the quarter on the back of the eurozone crisis," Tata Steel's chief financial officer Koushik Chatterjee told reporters in Mumbai.
High costs of important raw materials such as iron ore and coal also hurt operations, Chatterjee added.
Steelmakers around the world have been suffering from a slowdown in demand as industrial growth loses pace in emerging economies such as India and China and growth remains sluggish in advanced economies.
Europe accounts for around two-thirds of sales and production for the steelmaker which has an annual capacity of some 28 million tonnes.
Chatterjee forecast that global steel demand would improve in the current fiscal year with raw material prices stabilising.
Profit in the fourth quarter a year earlier was boosted by a one-time gain from the sale of a plant in Britain. Stripping out the gain, the drop in quarterly net profit would have been 77 percent, the company said.
The company, part of the sprawling Tata Group conglomerate, became one of the world's biggest steelmakers after purchasing Anglo-Dutch company Corus for $13.7 billion in 2007.
Europe-based Corus was rebranded as Tata Steel in September 2010.
For the full year to March, Tata Steel said its profit tumbled by 40 percent to 53.89 billion rupees ($997 million) from 89.83 billion rupees a year earlier.
Chatterjee said capital expenditure would rise to $2.5 billion this year from $2.2 billion last year.