TATA STEEL BACK WITH A BANG IN Q4; PAT AT ~6,644 CR
Third private sector company to report quarterly revenue of ~50,000 crore
Tata Steel, the country’s oldest steel producer, reported a higher-thanexpected consolidated net profit attributable to the owners of the company at ~6,644 crore in the March quarter of FY21, as against a net loss of ~1,481 crore in the corresponding period last year. The company’s performance was the best-ever across metrics such as revenue, Ebitda and net profit (excluding exceptional items). Revenue from operations jumped 39 per cent year-on-year to ~49,977 crore in Q4, on the back of higher steel prices and strong volumes, leading to strong operational gains.
Tata Steel reported a higher-than-expected consolidated net profit, attributable to owners of the company, at ~6,644 crore in the March quarter (Q4) of FY21, against a net loss of ~1,481 crore in the corresponding period last year.
The company’s performance was best-ever across metrics such as revenue, Ebitda (earnings before interest, taxes, depreciation, and amortisation), and net profit (excluding exceptional items).
Revenue from operations jumped 39 per cent year-onyear (YOY) to ~49,977 crore on the back of higher steel prices and strong volumes, leading to strong operational gains.
With this, Tata Steel has become the third private sector firm in India to report quarterly revenues of ~50,000 crore after RIL and Tata Motors. The steel maker reported total consolidated revenue of ~50,250 crore, including other income of ~272.2 crore. Overall, Tata Steel becomes the seventh nonfinancial firm, including four oil PSUS to report quarterly revenues of ~50,000 crore.
According to the management, domestic steel prices are still far lower compared to import parity, and that the consumer in India is getting the best price point for the commodity at present.
“Steel prices in India are cheapest compared to anywhere in the world. So, exporting steel could be a good opportunity and exporters would be most comfortable in the current price scenario. The current domestic steel prices are simply reflecting the demand in the market,” T V Narendran, MD and CEO of Tata Steel, said in the earnings call on Tuesday.
According to Bloomberg, Tata Steel’s top line was seen at ~46,105 crore, Ebitda at ~12,820 crore, and net income (GAAP) at ~6,509 crore.
Net profit was restricted by exceptional expenses of ~991.13 crore. Exceptional items include provision of ~723 crore for impairment of noncurrent assets, and an employee separation compensation of ~233 crore. The yearago quarter had exceptional items of ~3,853 crore, a key reason for the loss at the net level in the year-ago period.
Consolidated Ebitda of ~14,607 crore, up 135 per cent YOY, was the highest-ever consolidated quarterly Ebitda.
The previous high in terms of quarterly Ebitda was ~8,038 crore in September quarter of 2008. The consolidated net profit of ~7,162 crore in Q4FY21 was also its highest ever, beating the previous high of ~4,804 crore in Q2FY09.
Tata Steel has also become the second-most profitable in the Tata group, after Tata Consultancy Services (TCS). Tata Steel’s Ebitda is, however, higher than that of TCS.
“The Q4 performance has been outstanding in terms of both earnings and cash flows. It helped the company report one of the highest underlying performances for the full year in spite of the disruptions during the first half of the fiscal year,” said Koushik Chatterjee, ED and CFO, Tata Steel.
Consolidated free cash flows stood at ~8,826 crore in Q4 and at ~23,748 crore in FY21, helping in lowering debt.
Tata Steel’s dividend payout in FY21 will also be its highest ever. It announced a dividend payout of 250 per cent or ~25 per share to shareholders, beating the previous high of ~16 per share in FY08. This translates to a total payout of ~2,862 crore for FY21, beating the previous high of ~1,490 crore in FY19. A third of this (~956 crore), will accrue to Tata Sons in lieu of its 33.41 per cent stake in the company.