Tata Steel gains 5% on strong operational performance by Tata Steel BSL

Shares of Tata Steel were up 5 per cent at Rs 936.50 on the BSE in intra-day trade on Thursday after Tata Steel BSL, a subsidiary of the company, reported a strong operational performance for the quarter ended March 2021 (Q4FY21). The stock of Tata Steel BSL surged 6 per cent to Rs 61.25 in intra-day trade, quoting close to its 52-week high of Rs 62 touched on April 8.

Tata Steel BSL's consolidated net profit more-than-doubled to Rs 1,913 crore in Q4FY21, against Rs 913 crore in December quarter (Q3FY21). Consolidated revenue from operations jumped 24 per cent to Rs 7,321 crore from Rs 5,881 crore in the previous quarter.

Earnings before interest, taxes, depreciation and amortization (Ebitda) grew 25 per cent at Rs 257 crore on a sequential basis. The beat on Ebitda was driven by higher-than-expected volumes and realisation. Sales volumes rose 4 per cent quarter-on-quarter (QoQ) to 1.19 mt.

“The realization increased by Rs 10,182/t (20 per cent) QoQ to Rs 61,367/t. The same was higher by Rs 2,727/t (around 5 per cent) versus our estimate due to better product mix and higher other operating income (up Rs 1,300/t QoQ). As a result, EBITDA/t stood at Rs 21,510/t, up 52 per cent QoQ and 15 per cent higher than our estimate (Rs 18,678),” Motilal Oswal Securities said in a results update.

Tata Steel BSL is promoted by Tata Steel, holding 72.65 per cent shares of the company through its wholly-owned subsidiary Bamnipal Steel Limited. Tata Steel is among the leading companies of the conglomerate – Tata Group.  

Tata Steel has a strong marketing and distribution network across India and overseas markets. The product mix of high value-added steel products of the company complements Tata Steel’s product profile. The company thus continues to benefit from Tata Steel’s strong track record in the steel industry. The company has downstream facilities in Northern and Western regions, which caters to the demand of various auto players present in those regions. Moreover, the company’s plant is located close to the Kalinganagar plant (annual capacity of 3 million tonnes presently) of Tata Steel.