Tata Steel logs ₹1,018-crore profit in Q2
Higher production, better realisation help in turnaround
Tata Steel has reported a net profit of ₹1,018 crore in the September quarter against a net loss of ₹49 crore in the same period last year, on the back of higher production and better realisation.
Income from operations was up 20 per cent at ₹32,464 crore (₹27,120 crore).
Sales during the quarter under review was up 15 per cent at 6.45 million tonnes (mt), with India contributing 48 per cent. Gross debt increased by ₹2,447 crore to ₹90,259 crore largely due to increase in working capital and currency movement.
Consolidated quarterly Ebitda was at ₹4,726 crore with Ebitda margin of 14.6 per cent.
On a standalone basis, net profit grew four times to ₹1,294 crore (₹250 crore). Turnover increased 21 per cent to ₹14,221 crore (₹11,718 crore) on higher production. Sales were up 18 per cent at 3.08 mt while production increased 11 per cent to 3.03 mt.
EBITDA from Indian operations was up 71 per cent at ₹3,408 crore driven by better realisation and higher volumes. Tata Steel Kalinganagar works ramped up TV Narendran, MD, Tata Steel
and facilitated higher material availability besides providing entry into new segments with better product range, the company said in a statement on Monday.
Though liquid steel production in Europe was down three per cent at 2.60 mt, sales increased 15 per cent due to one-off sales and supply chain improvement, it added. EBITDA during the quarter at £89 million in Europe was down by £38 million primarily due to higher raw material cost.
More sales volume
TV Narendran, Managing Director, Tata Steel, said despite subdued steel demand due to slow construction activity, weak rural demand and poor consumer sentiment the company has managed to post a better performance with smooth ramp up of the Kalinganagar Steel plant providing more sales volume.
Steel sale to the automotive segment grew 34 per cent due to the company developing new grade of steel for new vehicle models, he added. Exports volume grew 60 per cent due to weak domestic demand.
The company remains positive on the outlook for India as government reforms are expected to facilitate domestic investment and growth. The thrust on tax reforms and transparency will facilitate the formalisation of economy and serve as tailwind to players like Tata Steel, he said.
Shares of the company were down one per cent at ₹719 on Monday.