Mumbai: Tata Steel, the world's seventh largest steelmaker, on Thursday reported a 89 percent fall in second-quarter consolidated net profit, lagging estimates, weighed down by rising raw material costs and weak prices in Europe.

Tata Steel reported profit of 2.12 billion rupees, compared with 19.79 billion rupees a year earlier.

A news agency poll of 11 brokerages had forecast quarterly net profit of 9.8 billion rupees.

The USD 500 billion global steel industry is facing an uncertain outlook, with European firms announcing production cuts in the face of waning demand, while steelmakers in Asia have had to trim investment plans.

Shares in Tata Steel, valued at USD 9.2 billion, closed down 4.2 percent on Wednesday, ahead of the results. The stock has declined 34 percent so far in 2011, compared with the 15.3 percent fall in India's benchmark index.

(Agencies)