Tata Steel’s PAT is seen to be around Rs 2,000-2,650 crore.
Tata Steel, which announces September quarter results on November 13, is expected to report a steady show in India business. But realisations could be under pressure on the back of weakness in long steel product segment, multiple brokerages wrote in their reports.
Meanwhile, European operations are likely to see lower EBITDA per tonne due to seasonal weakness in European market.
Here is a gist of what brokerages are expecting from the results.
Brokerage: Axis Securities | PAT: Rs 2,190 crore
Axis Securities expects consolidated volume to increase by 12% YoY at 7.2 million tonnes mainly due to inclusion of Bhushan Steel volumes. Domestic average realization to reduce marginally QoQ to Rs 55,000/t on correction in long steel product.
The brokerage also expects European profitability to be lower at EBITDA/tonne of USD 30 vs. USD 58 in Q1FY19 due to seasonal weakness in European market, lower volumes on outages and maintenance shutdown and spread compression.
Brokerage: Emkay | PAT: Rs 2,620.9 crore
Q2FY19 will be a better quarter for Tata Steel, Emkay said, adding that India sales volumes are expected to be at 3.1 million tonnes.
“Realizations are likely to be up marginally on a sequential basis. Better sales volume and higher realizations should aid better performance,” analysts at the firm wrote I their report.
Brokerage: ICICI Securities | PAT: 2,021.7 crore
ICICI Securities expects domestic operations to report healthy EBITDA per tonne at Rs 16,500 per tonne.
“The EBITDA/tonne is likely to moderate QoQ due to increased raw material prices (iron ore and coking coal). Indian operations are expected to report steel sale of 3.2 million tonne (MT) while European operations steel sales are likely to come in at 2.6 MT,” analysts at the firm wrote in their report.
On a consolidated basis, the topline is expected to increase 20.9% YoY, 3.7% QoQ. EBITDA is expected to increase 44.2% YoY, they added.
Brokerage: Motilal Oswal | PAT: Rs 2,680 crore
Motilal Oswal expects Tata Steel’s standalone EBITDA to increase 8% QoQ to Rs 5,180 crore on higher steel spreads.
EBITDA per tonne is estimated to increase 7% QoQ to Rs 16,947/tonne on higher realization.
It expects EU sales volumes to increase 1% QoQ to 2.5 million tonnes. Margins are estimated to expand to USD14/t on healthy steel spreads.
Consolidated EBITDA is expected to increase 5% QoQ to Rs 6,810 crore.
Key issues to watch for
Imports from China and global iron ore prices
Brokerage: Kotak Institutional Equities | PAT: Rs 2,462.7 crore
The brokerage expects marginal decline in India steel realizations due to weak prices in the long product segment.
“We expect marginal decline in India steel realizations due to weak prices in the long product segment. We estimate India EBITDA/ton at Rs16,950 (+55% yoy,-1% qoq) and model India volumes of 3.14 mn tons (flat yoy, +6% qoq),” the report further added.
Brokerage: Prabhudas Lilladher | PAT: Rs 2,657.7 croreStandalone volume is expected to grow 3.4% QoQ to 3.07 million tonnes. Realisations are expected to fall 1% or Rs 534/tonne QoQ to Rs 54,704/tonne. EBITDA/t is expected to grow 1.5%/Rs 248 QoQ to Rs 17,325.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.