ICICI Securities has come out with its first quarter (April-June) earnings estimates for the metal sector. The brokerage house expects Tata Steel to report a degrowth of 86.5 percent year-on-year) in net profit at Rs 81.9 crore.
Sales are expected to decrease by 1.8 percent Q-o-Q (down 4.4 percent Y-o-Y) to Rs 28970.8 crore, according to ICICI Securities.
Earnings before interest, tax, depreciation and amortisation (EBITDA) are likely to rise by 26.3 percent Q-o-Q (up 0.4 percent Y-o-Y) to Rs 2786.2 crore.
ICICI Securities report on Tata Steel
The company has disclosed saleable steel volumes at 2.36mnte. We are expecting an 8 percent Q-o-Q increase in realisations (standalone). Standalone EBITDA witnesses a smart increase of 12 percent Q-o-Q. Investments in market instruments can change the reported networth, if the company decides to report investment at market value.
There has been a significant improvement in spreads Q-o-Q in Tata Steel Europe. Long product Europe deal got concluded on 31st May, 2016. Hence the volumes will drop accordingly (0.23mnte Q-o-Q). Adjusting for the spread improvements against fixed costs from deal completion – we expect US$5/te of EBITDA from Tata Steel Europe in Q1FY17The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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