Tata Steel hits 52-week low after weak Q1 result

Tata Steel lost 3.06% to Rs 370.10 at 9:26 IST on the BSE after consolidated net profit dropped 63.58% to Rs 710.50 crore on 1.16% rise in total income to Rs 36320.02 crore in Q1 June 2019 over Q1 June 2018.

The result was announced after market hours yesterday, 7 August 2019.

Meanwhile, the S&P BSE Sensex was up by 127.76 points or 0.35% at 36,818.41.

On the BSE, 1.84 lakh shares were traded in the counter so far compared with average daily volumes of 6.24 lakh shares in the past two weeks. The stock had hit an intraday low of Rs 366.35, which is also a 52-week low. The stock hit an intraday high of Rs 378.90. It hit a 52-week high of Rs 646.70 on 21 September 2018.

Tata Steel's consolidated earnings before interest tax depreciation and amortization (EBITDA) declined 21.7% to Rs 5530 crore in Q1 June 2019 over Q1 June 2018. The company's consolidated steel production rose 11% to 7.15 million tonnes.

The company stated that during Q1 June 2019, steel prices across geographies declined with weakening economic activities and uncertainty around the ongoing US-China trade conflict. This coincided with a sharp rise in iron ore prices due to supply disruptions and elevated coking coal costs. As a result, steel spreads dropped by around US$ 80-100 per tonne in key markets.

In India, steel prices declined as subdued economic activity, seasonal slowdown and liquidity issues weighed on domestic consumption. Higher net imports further exacerbated the demand supply balance.

In Europe, the steel industry faced significant headwinds in terms of lower economic growth, uncertainty around Brexit and the trade conflict. This coupled with rising share of imports and elevated raw material prices has led to a sharp declined in steel spreads.

TV Narendran, CEO & MD, Tata Steel said that increased government spending and efforts to address the liquidity crunch should help revive demand and steel prices in India in the second half of the year.

Tata Steel is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum (MnTPA). It is one of the world's most geographically-diversified steel producers, with operations and commercial presence across the world.

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