Tata Steel logs ₹1,018-crore profit in Q2

Higher pro­duc­tion, bet­ter re­al­i­sa­tion help in turn­around

The Hindu Business Line - - NEWS -

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.

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