You are here: Home » PTI Stories » National » News
Business Standard

Tata Steel swings to profit in Q1

Press Trust of India  |  New Delhi 

Steel giant today posted a consolidated net profit of Rs 921.09 crore for the quarter ended June 30, 2017 on the back of higher from operations.

The company had posted consolidated net loss of Rs 3,183 crore in the year-ago period, said in a filing to

"Our sales were up by 28 per cent on a y-o-y basis as the smooth ramp up of our Kalinganagar facility helped us increase our volumes and increase our market share," T V Narendran, Managing Director, and South East said in a statement.

The consolidated from operations during April- June quarter was at Rs 30,973 crore, registering an increase of 19 per cent.

"We saw strong growth in our branded products, retail and solutions segment which increased 19 per cent y-o-y and now contributes around 48 per cent of overall revenues," Narendran said.

However, consolidated total expenses increased to Rs 28,844 crore, over Rs 25,003.7 crore in the year-ago period.

"From a sequential perspective, there was inventory destocking across the channel in the run-up to the GST implementation which led to a drop in volumes. While realisations were under pressure during the quarter, we are seeing a recovery in prices on the back of stronger domestic demand and better international prices," Narendran said.

The company said gross debt at Rs 87,812 crore as on June 30, 2017 went up by nearly Rs 4,798 crore from the previous quarter on account of forex impact, inventory buildup in as a result of GST implementation and seasonal trends in Europe.

However, net debt was significantly lower at Rs 71,703 crore.

Elaborating on its Indian operations, the company said that there were "deliveries of 2.75 million tonnes in Q1FY18. An increase of 28 per cent over the corresponding quarter of the last year (was) largely due to the ramp up of Kalinganagar facility. Sequential decline of 14 per cent due to seasonal factors, GST and planned shutdowns."

Liquid steel production in the first quarter of 2.79 million tonnes was seven per cent higher on a sequential basis and y-o-y basis.

Narendran said that the comapny remains positive on the outlook for steel markets given the thrust on infrastructure and affordable housing along with increased emphasis on buying domestic manufactured steel for government projects under the new steel policy.

"We expect the drop in interest rates and inflation to trigger a consumption cycle which will help our retail business and overall steel demand. We also expect rural demand to recover on account of good monsoons, higher MSP for crops and loan waivers. However, the appreciating rupee remains a cause for concern," Narendran added.

The company said that its SEA operations witnessed weak market conditions particularly in Singapore which affected the performance.

"Tata Steel Group witnessed an increase in revenues of 19 per cent compared to last year, due to increased capacity in India and ongoing restructuring in Europe," Koushik Chatterjee, Group Executive Director (Finance and Corporate), said.

During the quarter, Chatterjee said, the company sold its stake in for a gross consideration of around Rs 3,778 crore.

"With this sale, we have monetised over Rs 14,266 crore of divestments over the last 5 years. Tata Steel Europe strategic portfolio restructuring of focusing on strip business is now completed with the sale of 42-inch and 84-inch pipe mills in Hartlepool, UK to Liberty House Group," Chatterjee said.

"We are in advanced discussions with the BSPS Trustee, the Pension Regulator and the Pension Protection Fund in relation to RAA, and are hopeful of reaching final agreement shortly," Chatterjee added.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, August 07 2017. 20:48 IST