Tata Steel Q2 PAT seen down 6% YoY to Rs 200 cr
The world's 6th largest steel making company Tata Steel is set to declare its second quarter numbers today. Analysts on an average expect the company's consolidated profit after tax to fall by 5.8 percent year-on-year and 66 percent quarter-on-quarter to Rs 200 crore for the quarter.
November 09, 2012 / 10:27 IST
The world's 6th largest steel making company Tata Steel is set to declare its second quarter numbers today. Analysts on an average expect the company's consolidated profit after tax to fall by 5.8 percent year-on-year and 66 percent quarter-on-quarter to Rs 200 crore for the quarter.
Consolidated net sales are seen going down by 2 percent YoY and 5 percent QoQ to Rs 31,866 crore in the three months period ended September 2012.Earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to increase 14.9 percent YoY to Rs 2,825 crore in the second quarter but that is likely to decline 10 percent on QoQ basis.EBITDA margin is expected to be at 8.9 percent in the July-September quarter as against 7.6 percent in a year ago period and 9.3 percent in the previous quarter.On a standalone basis, analysts feel the Indian business is profitable while other international businesses drag the earnings.Net sales are seen rising 8 percent YoY to Rs 8,800 crore and EBITDA is likely to go up by 1 percent to Rs 2,750 crore during the same period. The profit after tax is expected to be flat at Rs 1490 crore as against Rs 1,495.22 crore YoY.India operations: Analysts expect sales to increase 4 percent QoQ to 1.65 MT, but realizations to drop 4 percent QoQ.Domestic steel pricing environment remained weak in second quarter of current financial year; long and flat prices decreased 8-9 percent QoQ.Analysts expect India's EBITDA per tonne to decline sequentially to USD 304 per tonne from USD 336 per tonne in Q1FY13, driven by lower realizations. In the second quarter of previous year, EBITDA/tonne stood at USD 346 per tonne for Indian operations.EBITDA/tn will be lower despite the benefits of higher sequential volumes.Tata Steel Europe (earlier Corus) and others: Analysts expect sales volumes to be flat QoQ at 3.2mt while down 8 percent YoY.Europe and South East Asia operations too will report a drop in EBITDA per tonne due to decline in global steel prices. Analysts expect TSE to report negative EBITDA due to declining realization in Europe. They expect the European operations to report an EBITDA loss of USD 5 per tonne in the second quarter of FY13 as against EBITDA profit of USD 34 per tonne in Q1FY13 and EBITDA profit of USD 30 per tonne in second quarter of previous financial year.Analysts expect TSE margins to decline QoQ owing to the sharper decline in average selling price, which will exceed the decline in input costs.Prime reasons for margin pressure were: (i) Average steel prices declined 7% QoQ in Q2FY13 in Europe and (ii) Likely write down of coking coal and iron ore inventory.Investors should also watch out for inventory writedown due to sharp fall in raw material/steel prices. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
