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Tata Steel likely to post a loss in Q1 as lockdown hits demand

Motilal Oswal expects consolidated loss at Rs 2,928.6 crore for the quarter with 81 percent fall YoY (down 78 percent QoQ) in EBITDA YoY.

August 13, 2020 / 07:31 AM IST
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Tata Steel is expected to post a loss in the range of Rs 1,900-2,900 crore for the quarter ended June 2020, as lockdown in several countries due to COVID-19 crisis impacted steel demand.

According to brokerage houses, revenue from operations could fall more than 35 percent year-on-year as volumes declined sharply while operating performance is expected to be impacted majorly by Europe which is likely to post a loss at the EBITDA level.

"We estimate steel realisation to decline by 9 percent QoQ (down 17 percent YoY) due to higher exports and lower prices in the domestic markets on the resumption of activities," said Kotak Institutional Equities which expects volumes to decline sharply by 35 percent YoY (down 33 percent QoQ) at 1.96 million tonnes during Q1 FY21, factoring the impact of COVID-19.

India EBITDA per tonne may decline by 36 percent QoQ (down 36 percent YoY) due to lower realisations, Kotak said, adding that Europe EBITDA loss per tonne may come at $35 per tonne due to declining steel spreads and a sharp cut in steel volumes due to the partial shutdowns at plants.

Motilal Oswal expects consolidated loss at Rs 2,928.6 crore for the quarter with 81 percent fall YoY (down 78 percent QoQ) in EBITDA.

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first published: Aug 13, 2020 07:31 am

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