Tata Steel consolidated net profit up 46.8% YoY in March quarter

Tata Steel reported a 46.8 per cent year-on-year (YoY) increase in consolidated net profit attributable to the owners of the company at Rs 9,756 crore for the quarter ended March 2022 with the European business delivering a strong performance. Sequentially, net profit was up by 1.9 per cent.

The company’s reported profit after tax on a consolidated basis stood at Rs 9,835 crore, an increase of 37.32 per cent.

Total revenues for the quarter at Rs 69,324 crore were higher by 38.6 per cent compared to Rs 50,028 crore in the year-ago period.

For FY22, Tata Steel reported its highest ever consolidated EBITDA of Rs 63,830 crore with an EBITDA per tonne of Rs 21,626. Profit after tax was also the highest ever at Rs 41,749 crore.

The board on Tuesday recommended a dividend of Rs 51 per fully paid equity share and Rs 12.75 per partly paid equity shares. A 10:1 stock split was also recommended.

“Our Indian business showed broad based growth across our chosen segments due to our sustained focus on customer relationships, our distribution network and our portfolio of brands supported by our agile business model,” said T V Narendran, chief executive officer and managing director, Tata Steel.

He added that the European operations delivered robust performance as the transformation programme undertaken helped to leverage the strong business environment.

In Q4FY22 Tata Steel Europe reported an EBITDA of Rs 4,349 crore compared to Rs 1,194 crore in Q4FY21. Narendran said that it was a “very good” quarter for Europe with EBITDA for the year at 1.2 billion pound.  

The numbers for FY22 however stood out surpassing Tata Steel’s previous best.

“We have closed the financial year with consistent and record operating and financial performance for the year, surpassing the previous best in FY21, with EBIDTA being 2x and profit after tax being >5x the previous year,” said Koushik Chatterjee, executive director and chief financial officer.

“This is despite the significant surge in international coal prices and inflationary impact of various commodities. Our full year consolidated revenues stood at Rs 2,43,959 crore and EBIDTA was Rs 63,830 crore which works out to a margin of 26 per cent and EBITDA per ton of Rs 21,626,” Chatterjee said.

Buoyed by the performance, Tata Steel is pushing the growth pedal. Chatterjee said that while the company would continue to focus on deleveraging, it would also be advancing strategic growth priority.

In the last two years, incidentally, Tata Steel reduced net debt by almost Rs 53,000 crore (the company repaid Rs 15,232 crore during the year).

“Now, we will be looking at higher capital allocation for growth in the near future,” Chatterjee said.

On growth capex, Tata Steel will start the year with a capital allocation of Rs 12,000 crore. But the company may look at further capex in the second half of the year.

Tata Steel is looking at a capacity of 40 million tonnes by 2030 and may look at accelerating some projects. The company, which is the second largest private sector steel producer in India, has a capacity of about 20 million tonnes in India.