Tata Steel Q2 results: PAT rises eight-fold to Rs 11,918 crore

Tata Steel, the country’s oldest steel producer, has reported a consolidated net profit at Rs 11,918 crore in the September quarter, up nearly eightfold or 661 per cent from the corresponding period last year.

The company is looking to deleverage around Rs 12,000 crore this year, depending on cash flows. It had deleveraged Rs 11,800 crore last year.

Sequentially, the net profit was up 34 per cent in the period as net sales increased on the back of higher deliveries in the Indian market. Besides, revenues from India operations got a boost from higher steel prices.

Net sales of the company in the second quarter stood at Rs 59,394 crore, up 55 per cent from last year and 13 per cent from the preceding quarter.

For India operations, overall deliveries increased by 11 per cent sequentially to 4.58 million tonnes despite a market demand contraction amid seasonal weaknesses, said Tata Steel. Also, the sales volume in the automotive segment in the domestic market incre­ased by 18 per cent sequentially des­pite weaknesses due to a semiconductor shortage, it added.

“Tata Steel has delivered strong results across key geographies in this seasonally weaker quarter. Our European operations have delivered a robust performance, underpinned by strong improvement in realisations. We are watchful of the elevated coal prices and high energy cost as key risks to margins,” said T V Narendran, chief executive officer and managing director, at the earnings conference.

A poll by Bloomberg estimated the company’s top line at Rs 59,034 crore in the quarter ended September 30, while the bottom line was seen at Rs 11,831 crore. The company’s other expenses in the September quarter increased to Rs 18,850 crore from Rs 11,996 crore in the same period last year and Rs 14,847 crore in the preceding quarter.

This increase was primarily at Tata Steel India operations as nearly a Rs 1,000-crore provision had to be made for royalty transfers for BSL (formerly Bhu­shan Steel) and Tata Meta­liks, along with one for rates and taxes at Tata Steel Europe.

The consolidated adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 12 per cent sequentially in the September quarter to Rs 17,810 crore and this was the highest quarterly consolidated Ebitda, it said.

The company's consolidated free cash flow stood at Rs 3,322 crore during the September quarter despite an increase in working capital of Rs 3,889 crore and dividend payment of Rs 3,020 crore. The company spent Rs 2,191 crore on capex during the quarter.