Tata Sponge Iron's shares are falling. Know why

Shares of Tata Sponge Iron fell as much as 3 percent on Wednesday after the company reported earnings that were well below market expectations.

Tata Sponge said its first quarter net profit plunged to `7 crores compared with 44 crore rupees in the same quarter a year ago. Sales during the April-June quarter slumped to `142 crores versus `203 crore rupees, according to the press release issued by the company after markets closed on Tuesday.

As a consequence, Tata Sponge fell 7.65 rupees, or 1.5 percent, to 524.40 rupees on the National Stock Exchange where 2.4 lakh shares were traded in the first 45 minutes of trade compared with a 5-day average of 3.4 lakh shares.

Steel and Steel related stocks have been out of investor interest and that is visible in the 40 percent erosion in Tata Sponge's market capitalisation to 824 crore rupees over one year.

(Image credit: Indiatimes)