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Tata Steel Ltd.

BSE: 500470 Sector: Metals & Mining
NSE: TATASTEEL ISIN Code: INE081A01020
BSE 12:12 | 18 Aug 111.75 -0.75
(-0.67%)
OPEN

112.50

HIGH

113.00

LOW

111.35

NSE 11:59 | 18 Aug 111.75 -0.75
(-0.67%)
OPEN

112.50

HIGH

113.00

LOW

111.70

OPEN 112.50
PREVIOUS CLOSE 112.50
VOLUME 2250012
52-Week high 153.38
52-Week low 82.71
P/E 4.45
Mkt Cap.(Rs cr) 136,481
Buy Price 111.65
Buy Qty 4882.00
Sell Price 111.75
Sell Qty 1363.00
OPEN 112.50
CLOSE 112.50
VOLUME 2250012
52-Week high 153.38
52-Week low 82.71
P/E 4.45
Mkt Cap.(Rs cr) 136,481
Buy Price 111.65
Buy Qty 4882.00
Sell Price 111.75
Sell Qty 1363.00

Tata Steel Ltd. (TATASTEEL) - Chairman Speech

Company chairman speech

Leading with resilience

During the financial year the Company achieved the highest everconsolidated EBITDA of Rs.63830 crore a growth of 107% translating into an EBITDA pertonne of Rs.21626 and a healthy EBITDA margin of 26%.

Dear Shareholders

It gives me immense pleasure to write to you at the end of an eventfulyear for Tata Steel. I hope this letter finds you and your families well and safe.

We began the year amidst the deadliest wave of the pandemic which tooka severe toll on lives and livelihoods not just in the country but the world over. As theworld navigated through the disruptions brought by the pandemic economic activitycontinued to experience several instances of volatility and uncertainty.

After a 3.5% contraction in CY 2020 world GDP rebounded at anestimated 5.5% in CY 2021 reaching a new high in the first quarter. The improved economicperformance was the result of rapid vaccinations relaxation in curbs caused by thepandemic massive fiscal support robust consumer spending and improved business activity.The Indian economy too quickly overcame the pandemic's headwinds. India's GDP isestimated to have expanded 8.7% in FY 2021-22 against a contraction of 6.6% in FY 2020-21.

As we continued to navigate through the pandemic with resilience thewar in Ukraine has triggered another crisis that has brought before us numerous otherchallenges in the form of strained geopolitical and trade relations.

The ongoing geopolitical conflict re-imposition of lockdown in Chinaon account of fresh COVID-19 cases global inflation and continuing supply shortages areexpected to adversely impact global GDP growth in 2022. The World Bank expects globalgrowth to decelerate from an estimated 5.5% to 3.2% Commodity and energy prices areexpected to remain high in the wake of the conflict and sanctions thereby resulting in anincrease in global inflation.

While there exist risks of high input costs the growth of the Indiansteel industry is likely to remain stable as domestic demand is expected to remain robustand global supply-demand dynamics may present export opportunities.

FY 2021-22 was a pivotal year for the Company. We demonstratedextraordinary resilience agility and adaptability which allowed us to record best-everEBITDA performance despite continued uncertainties. The Company was able to acceleratebusiness restructuring innovation and growth.

During the financial year the Company achieved the highest everconsolidated EBITDA of Rs.63830 crore a growth of 107% translating into an EBITDA pertonne of Rs.21626 and a healthy EBITDA margin of 26%. The Company generated free cashflow of Rs.27185 crore and reduced its net debt by 32% to Rs.51049 crore in FY 2021-22.

On the back of this performance I am happy to report that the Board ofDirectors have recommended a dividend of Rs.51/- per fully paid up equity share andRs.12.75 per partly paid-up equity share of the Company which translates to a highestever dividend payout of 510% per share. The Board of Directors has also recommended asub-division of the equity shares in the ratio of 10:1.

The continued steel cycle upswing saw the Company scaling its businessby way of both organic capital expansion and inorganic acquisitions.

The most significant of these is the proposed acquisition of NeelachalIspat Nigam Limited through its subsidiary Tata Steel Long Products Limited for a totalconsideration ofRs.12100 crore.This proposed acquisition is expected to providesignificant opportunity for Tata Steel to develop a state-of-the-art long products complexin the next few years that will leverage synergies with the shared infrastructure of TataSteel in that area. Some of the other acquisitions during the year were in the areas ofmining ferro alloys and advanced ceramics. The year also saw the Company successfullyamalgamate Bamnipal Steel Limited and Tata Steel BSL Limited into and with Tata Steel.

The continued steel cycle upswing saw the Company scaling its businessby way of both organic capital expansion and inorganic acquisitions.

As part of its business restructuring exercise the Companysuccessfully divested its stake in NatSteel Holdings Pte Limited Singapore for an equityvalue of Rs.1275 crore.

Meanwhile the Company continued to accelerate its capex allocation forthe 6 MnTPA Pellet Plant the 2.2 MnTPA Cold Roll Mill Complex along with the 5 MnTPAexpansion at Kalinganagar. The 6 MnTPA Pellet plant will be commissioned in Q3 FY23followed by the Cold Roll Mill Complex and the 5 MnTPA expansion which will drive costsavings and product mix enrichment.

The Company has also made progress in the New Materials Business. TataSteel has the objective to build its business in knowledge and intellectual propertyintensive and non-cyclical new materials. The Company is exploring Composites Grapheneand Advanced Ceramics as areas of growth. During the year the Company through itssubsidiary started working towards building a world-class facility to produce medicalmaterials with a focus on healthcare.

In Europe Tata Steel achieved a complete separation of its UK andNetherlands operations in October 2021. Under the new structure Tata Steel UK and TataSteel Netherlands will operate as two independent companies pursuing separate strategicpaths.

Tata Steel continues to invest significantly in new technologies fordigital transformation with the objective to render a more agile organisation that betterresponds to changing market dynamics and to make our businesses more resilient.

The pandemic has acted as a catalyst for accelerating our digitaltransformation efforts across various spheres of our business to ensure workforce safetybusiness continuity sustainability and agile decision-making.

Towards this end this year we piloted digitising our factories bycreating 'Digital Twins' a simulated digital replica of factories through real-time dataanalytics thereby opening up possibilities for data-driven 'Smart Factories' in thefuture.

The Company has also taken significant strides to adopt efficient cleanenergy technologies and circular economy projects which underpin our transition tobecoming a climate neutral organisation. The most notable project in this area was thecommissioning of the 5 TPD C02 capture plant at Jamshedpur to extract C02directly from blast furnace gas a first in India by a steel company.

In acknowledgement of Tata Steel's efforts and commitment towardsprinciples of sustainability the World Steel Association has once again recognised TataSteel and Tata Steel Europe as Sustainability Champions for the fifth consecutive year.Tata Steel was also inducted as a member of worldsteel's New Sustainability Charter whichlooks to generate positive impacts on people planet and the prosperity of society.

Our CSR initiatives and outreach activities continued to reflect ourendeavour to operate as a socially conscious and responsible organisation which strives tobuild resilient and empowered communities.

Towards fulfilling these aspirations Tata Steel's programs across thethematic areas of Education Nutrition Health Livelihood Water resource management andWomen & Youth empowerment reached 2.87 million lives and our employees contributed toover 51000 hours of volunteering work.

During the repeated waves of the pandemic Tata Steel made everypossible effort to serve the community by providing sustenance supplies counselling andlivelihood support.

Tata Steel supplied over 80000 tonnes of liquid medical oxygenprovided vaccination at doorstep and distributed masks and Rapid Antigen Testing (RAT)kits to communities where it operates.

The Company introduced the Social Security COVID-19 Family ProtectionScheme for the families of all the employees who lost their lives due to the pandemic toensure an honourable standard of living for their families.

With the bulk of our population covered by vaccination the risk oflarge-scale infections and mortality appears low. However with ramped up health andmedical oxygen infrastructure and institution of comprehensive safety measures Tata Steelremains prepared to ensure effective and rapid response to any fresh surge.

In conclusion the Indian economy is expected to remain resilientdespite the ongoing geopolitical conflict which is likely to undermine the world GDPgrowth. India is expected to remain one of the world's fastest growing large economies.The government's resolve towards faster infrastructure development through supportivepolicy reforms is expected to catalyse growth.

Best ever financial performance and a dominant market position providesTata Steel solid foundations to capitalise on improved infrastructure activity simplifyand transform its business structure accelerate digital and green innovations and embarkon the next level of sustained growth.

I would like to thank Dr. Peter Blauwhoff and Mr. Aman Mehta for theircontributions to the Board of the Company. I also welcome Ms. Farida Khambata Mr. DavidCrane and Mr. Noel N.Tata on the Board of the Company.

I thank all our employees for their commitment and engagement towardsbuilding a strong agile and responsible organisation. I also express my sincere gratitudeto all stakeholders for their continued trust and support and wish that you continue toaccompany us in our journey to meet our ambitions for the future.

Warm regards

N. Chandrasekaran

Chairman

.