Tata Steel's second quarter profit may fall 46.3 percent year-on-year to Rs 821 crore and revenue is seen declining 7.4 percent to Rs 27,150 crore, according to average of estimates of analysts polled by CNBC-TV18.
However, operating profit (EBITDA) is likely to surge 93 percent to Rs 3,531 crore and margin may expand 680 basis points to 13 percent compared with year-ago period.
Strong volumes in India and higher spreads in Europe may support overall numbers during the quarter.
ArcelorMittal Europe EBITDA was strong at USD 76 per tonne in July-September quarter against USD 67 per tonne in June quarter and USD 35 per tonne in March quarter. Hence, analysts expect a strong Tata Steel Europe EBITDA per tonne.
Analysts expect better domestic (standalone) performance aided by volume growth. Domestic sales volumes increased 12.6 percent YoY to 2.6 million tonnes in Q2. EBITDA per tonne is expected to fall sequentially but may be higher YoY.
Ferro alloy business is also likely to improve substantially on yearly basis.
Europe performance is expected to be stable during the quarter. EBITDA (earnings before interest, tax, depreciation and amortisation) is likely to be at USD 46 per tonne against negative USD 11 per tonne in year-ago period.
Europe steel volumes are expected to decline due to sale of the UK long products division to Greybull and lower activity levels at UK flat steel plants.
Key things to watch out for would be clarity on restructuring of the European business, pension liability and high debt.
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