Tata Steel Q4 net profit down 82% to Rs 1,704.86 crore but beats estimates

In Q4FY23, Tata Steel Europe reported an EBITDA loss of Rs 1,641 crore. In the previous quarter, EBITDA loss had stood at Rs 1,551 crore

Tata Steel

Photo: Bloomberg

Ishita Ayan Dutt Kolkata

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Tata Steel reported an 82.52 per cent year-on-year (YoY) drop in consolidated net profit to Rs 1,704.86 crore in the January-March quarter (fourth quarter, or Q4) of 2022-23 (FY23) as steel spreads across regions took a hit.

Revenue for the quarter was at Rs 62,961.54 crore, down 9.17 per cent from Rs 69,323.50 crore in the year-ago period.

The revenue and profit numbers came in ahead of expectations. A Bloomberg consensus estimate had pegged revenue at Rs 60,629.9 crore and net income adjusted at Rs 480.4 crore.

Sequentially, the performance improved on the back of India operations performance. In the previous quarter, Tata Steel had posted a net loss of Rs 2,223.84 crore. Quarter-on-quarter (QoQ), revenue was up 10.29 per cent.

In Q4FY23, Tata Steel Europe reported an earnings before interest, tax, depreciation, and amortisation (Ebitda) loss of Rs 1,641 crore. In the previous quarter, the Ebitda loss had stood at Rs 1,551 crore.

The company said that the consolidated revenue for FY23 was at Rs 2.43 trillion and was broadly similar YoY despite a volatile operating environment across geographies. Consolidated net profit for the year was at Rs 8,760.4 crore, compared with Rs 40,153.93 crore a year back.

T V Narendran, chief executive officer and managing director, Tata Steel, said, “FY23 saw our India crude steel production growing to about 19.9 million tonnes (mt), with a 65 per cent share of our overall volumes.”

Deliveries, he said, were in line with production, with domestic deliveries growing 11 per cent YoY and driving product mix improvement.

“The quarter also saw strong momentum, with deliveries growing 9 per cent QoQ to 5.15 mt. We have multiple projects ongoing at various locations in India as we work towards 40 million tonnes per annum (mtpa) by 2030,” he said.

Koushik Chatterjee, executive director and chief financial officer, said that consolidated Ebitda was at Rs 32,698 crore, which translates into an Ebitda margin of 13 per cent and an Ebitda per tonne of Rs 11,358.

“The India business generated a margin of 20 per cent, while Europe was at 5 per cent, with higher input costs affecting margins. The consolidated return on invested capital was 15 per cent for the full year,” he said in a statement.

The company’s capital expenditure (capex) was at Rs 4,396 crore during the quarter and Rs 14,142 crore for the full year.

In the last two quarters, Neelachal Ispat Nigam had ramped up and was currently operating with a run rate of 1 mt (crude steel plus pig iron) on an annualised basis.

Chatterjee said, “Our capex was Rs 4,396 crore for the quarter as we prioritise completion of the 5 mtpa Kalinganagar expansion and free cash flow at Rs 4,809 crore.”

However, he said the company had reduced leverage by Rs 3,900 crore this quarter and net debt was at Rs 67,810 crore.

“We were successful in maintaining our interest cost despite the 250-basis point increase in benchmark interest rates,” Chatterjee said in the statement.


First Published: May 02 2023 | 9:32 PM IST

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