Tata Steel Ltd reported an 87 percent year-on-year fall in consolidated profit after tax of Rs 1,514 crore for the September quarter on October 31. Profit dropped by 80% sequentially.
Consolidated sales for the Tata group company remained steady, with a 1% year-on-year fall to Rs 59,878 crore. They declined 6% sequentially. Realizations fell amid a global meltdown in commodity prices, even though a drop in volumes in Europe was offset by a rise in local volumes. Input cost increases adversely impacted margins and profitability.
Despite these obstacles, Tata Steel recorded its best-ever domestic sales in India, thanks to a robust product portfolio and an extensive distribution network that supports end-to-end requirements in certain industries, according to Narendran.
The consolidated production for the quarter was 7.56 million tons (MT), a 3% decrease year on year and a 2% decrease from the previous quarter. Consolidated deliveries of 7.23 MT were down 2% year on year but up 9 percent sequentially.
India deliveries increased by 21% QoQ and 7% year on year, mostly owing to record domestic deliveries, while European deliveries decreased sequentially due to seasonal factors and sluggish demand in Europe.
EBITDA and margins
The business reported consolidated earnings before interest, tax, depreciation, and amortization (EBITDA) of Rs 6,271 crore, a 62 percent decrease from the same period last year and a 58 percent decrease from the prior quarter.
As a result, EBITDA per ton fell 60% year on year and sequentially to Rs 8,673 from above Rs 22,000 per ton in previous periods. Tata Steel’s adjusted standalone business had a 71.6 percent loss in EBITDA per ton to Rs 8,741/tonne, while the company’s European segment saw a 38.9 percent drop to Rs 9,540/tonne.
Because of the acquisition of Neelachal Ispat Nigam Limited (NINL), the division numbers of Tata Steel Long Products are not fully equivalent. The segment reported an EBITDA per ton loss of Rs 14,594/tonne. Tata Steel Thailand fell 86.3 percent to Rs 1,005 per ton.
Increase in debt
Tata Steel’s gross debt for the quarter ended September 30, 2022, was Rs 87,516 crore, up 5.96 percent from Rs 82,597 crore in the June quarter. The accumulation of substantial cash payouts of Rs 19,000 crore in Q2 due to the NINL acquisition, together with the FY22 dividend payout and growth expenditure, drove an increase in gross debt, according to the company’s press announcement.
Other notable features
The 6 MTPA (million tons per annum) Pellet plant will be operational in Q3FY23, followed by the Cold Roll Mill complex in stages. The business stated that the 5 MTPA expansion at Kalinganagar is on schedule for completion by the end of FY24.
Tata Steel began ramping up the blast furnace of Neelachal Ispat Nigam (NINL) in October, just three months after completing the acquisition. The company’s Board of Directors has approved the amalgamation plan of seven listed and unlisted firms into Tata Steel, a value-accretive combination with many benefits.
Tata Steel Limited is an Indian multinational steel corporation headquartered in Mumbai, Maharashtra, with headquarters in Jamshedpur, Jharkhand. It belongs to the Tata Group.
Tata Steel, formerly known as Tata Iron and Steel Company Limited (TISCO), is a global steel producer with an annual crude steel capacity of 34 million tonnes. It is one of the most geographically diverse steel producers in the world, with operations and commercial presence worldwide.
In the fiscal year that ended March 31, 2020, the group (excluding SEA businesses) had a consolidated turnover of US$19.7 billion. After Steel Authority of India Ltd, it is India’s second-largest steel company (based on domestic output) with an annual capacity of 13 million tonnes (SAIL).
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