Tata Steel Ltd warned investors on Wednesday it did not see improvements coming swiftly in Europe, where steel demand has languished since the financial crisis and clients have turned to cheaper Chinese imports.

Tata Steel, Europe's second-largest steelmaker, is already selling some loss-making European operations catering to the engineering and construction industries, and it said a slow recovery was holding back its turnaround in the region.

"Forward indicators suggest that imminent improvements are not to be expected," Karl-Ulrich Köhler, Tata Steel's chief executive for Europe, told reporters in Mumbai.

Rival ArcelorMittal last week trimmed its forecast for European steel consumption to a range of 3 to 3.5 percent, but was positive on the outlook, in part thanks to its exposure to the auto sector.

Tata is also trying to shift to higher-end, higher-margin speciality steel.

The company on Wednesday reported a 37 percent rise in quarterly net profit, though that was lifted by cash from the sale of land in Mumbai which netted the group 11.5 billion rupees ($187 million) in gains.

European profits benefitted from the sharp drop in iron ore prices, but both production and revenues were virtually flat.

Tata Steel entered Europe through its $13 billion acquisition of Corus in 2007, just before financial crisis. It has since been forced to restructure operations and focus on higher-margin products to compete in a market where demand has yet to return to reach pre-crisis levels.

"In Europe we are increasingly concerned about the impact of rising imports, particularly from China, on EU steelmakers," said Köhler, adding that imports of finished products into the continent rose 20 percent in the first nine months of 2014.

Tata Steel's net profit rose to 12.54 billion rupees ($204 million) for its second quarter to Sept. 30, above market expectations of 7.38 billion, according to Thomson Reuters data. Revenues, however, fell 2.4 percent.

The company declined to update investors on discussions over the sale of its European long products business, including mills in northern England and Scotland, but said due diligence would continue into 2015.

"It's not a value game that we're looking at, it's more from a strategic point of view," Chief Financial Officer Koushik Chatterjee said.

Tata Steel, India's largest steel maker by market value, is grappling with mine closures and license renewals at key operations at home. It said it had imported 2.2 million tonnes of iron ore this year to make up for domestic shortfall.

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