Tata Steel Q1 PAT at Rs 763 crore, up more than 100% annually

Company reports strong bottomline due to sharp fall in expenditure, increased other income

Tata Steel’s consolidated net profit in the April-June 2015 quarter more than doubled to Rs 763 crore on a year-on-year (y-o-y) basis even as its net sales declined in the period under review. The earnings growth was driven by a sharp fall in the operating expenses, lower tax outgo and higher other income. Relatively lower finance cost and small benefit from exceptional item also lent some support to the bottom line, which the Street expected to be a loss-making quarter for the steel maker.

According to Bloomberg estimates, the Street was expecting the firm to report a net loss of Rs 555.7 crore, while net sales was expected to decline 18.3 per cent on a y-o-y basis. The stock was down 5.5 per cent on Tuesday. The results came after market close.

On a standalone basis, India operations’ net profit halved to Rs 1,248 crore on a y-o-y basis due to lower sales and increased costs. Lower taxes expenses and finance costs and higher other income were not enough to cushion the bottom line.Net sales of India operations stood at Rs 9,005 crore, down 15 per cent from same the period last year.

“The Indian steel industry continues to bear the brunt of a surge in imports and tepid domestic demand which led to a sharp drop in steel prices over the quarter," T V Narendran, managing director of India and South East Asia said in a statement.

The consolidated net sales were better-than-expected at Rs 29,900 crore in the quarter, down 17.3 per cent from same period last year. Lower steel prices led to lower price realisations. The earnings before interest, taxes, depreciation and amortisation per tonne stood at Rs 4,424 in the June quarter, down 34 per cent from corresponding period last year.