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Last Updated : Nov 13, 2018 08:38 PM IST | Source: Moneycontrol.com

Tata Steel Q2 net profit jumps to Rs 3,604.2 crore on strong operational show

The EBITDA per tonne has been reported at Rs 19,244 per tonne.

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Tata Steel reported a net profit of Rs 3,604.2 crore for the September quarter. The company had posted a profit of Rs 975.87 crore during the same quarter of last year.

The revenue grew to Rs 43,544.1 crore during the quarter under review, up from Rs 32,464.14 crore posted last year. This implies a jump of 34 percent year on year.

The earnings before interest, taxes, depreciation and amortization (EBITDA) was reported at Rs 8,919.5 crore. It implies a jump of 89 percent from Rs 4,720 crore reported last year.

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The operating margin has been reported at 20.5 percent, up from 14.5 percent reported last year.

The EBITDA per tonne has been reported at Rs 19,244 per tonne.

The liquidity position of the group remains at Rs 26,470 crore, comprising of Rs 14,478 crore in cash and cash equivalents and Rs 11,992 crore in undrawn bank lines, the company said in an exchange filing.

“Gross debt during the quarter increased by Rs 2,065 crore, primarily due to adverse forex impact of Rs 3,528 crore. Net debt was flat at around Rs 1,04,202 crore,” the company wrote in the exchange filing.

Sales volumes

The company’s India business sales volume was reported at 3.18 million tonnes, up 7 percent QoQ.

Meanwhile, its Europe operations were down 7 percent QoQ to 2.27 million tonnes.

"Tata Steel Group delivered extremely strong results this quarter driven by robust operational performance and favourable business conditions in India. This quarter, despite a seasonally weaker period, we sold 4.32 million tons across Tata Steel Standalone and Bhushan Steel… We continue to work on our strategy of increasing our Indian footprint as we ramp up operations at Bhushan Steel and implement our 5mtpa expansion at Tata Steel Kalinganagar…. While we are positive on steel demand outlook especially in India, the risk of trade wars and increasing imports remains a concern," T V Narendran, CEO & Managing Director said in a statement.

Takeaways from the post-result media briefing

On EU commission investigation into Tata Steel Europe and thyssenkrupp JV, Narendran said they are in discussions with the European Commission for the phase two review which typically takes 90 days.

The Commission has identified three areas, including packaging steel and electrical steel, in which the JV could have a dominant position.

The company is already looking to divest its electrical steel portfolio, including assets in Canada and UK, said Koushik Chatterjee, Executive Director, Tata Steel.

"This has been one of the best ever quarter for Tata Steel India on the back of strong operating and market performance with the EBITDA margin of 34 percent and in excess of Rs.19,000 per ton,” said Chatterjee.

It was the best ever EBITDA margin for the India operations, and the highest quarterly EBITDA in six years, he added.

On ArcelorMittal’s possible entry in India, Narendran said Indian industry will benefit from world-class players. From Tata Steel’s perspective, we will up the ante and compete. We don’t have a problem with that. We anyways compete with ArcelorMittal in Europe, said Narendran.

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First Published on Nov 13, 2018 07:01 pm
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