Tata Steel on May 2 reported an 84 percent year-on-year drop in its consolidated net profit at Rs 1,566 crore from the quarter ended March 2023. Net profit in the year-ago period stood at Rs 9,835 crore.
While profit dropped 84 percent, it managed to beat Street expectations. Brokerages had estimated a 91 percent drop at Rs 955 crore due to weak performance in the Europe business.
The steelmaker's Q4 revenue from operations came in at Rs 62,962 crore, down 9.2 percent from Rs 69,323 crore in the year-ago period. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 52 percent YoY to Rs 7,225 crore.
Operating margins contracted to 11.5 percent from 21.7 percent in the year-ago period. However, the company saw strong momentum with deliveries growing by 9 percent sequentially to 5.15 million tons.
"For the full financial year, we saw our India crude steel production growing to around 19.9 million tons, with a 65 percent share of our overall volumes. Deliveries were in line with production with domestic deliveries growing 11 percent YoY and driving product mix improvement," TV Narendran, chief executive officer and managing director said.
Tata Steel's net debt decreased by around Rs 3,900 crore to Rs 67,810 crore. "Our liquidity remains strong at Rs 28,688 crore. Net debt to EBITDA was 2.07x," the company stated in a press release.
India business posted strong performance. The segment achieved the highest ever annual crude steel production of 19.88 million tons and highest ever deliveries of 18.87 million tons.
Neelachal Ispat Nigam (NINL) steadily ramped up during the last two quarters and is presently operating with a run rate of 1 million tons (crude steel plus pig iron) on an annualised basis, the company said.
Meanwhile, in the Europe business, inflationary pressures and sustained volatility weighed on steel fundamentals during the year. Concerns about the banking sector in the January– March quarter added to the mix.
"The India business generated a margin of 20 percent while Europe was at 5 percent with higher input costs affecting margins. The consolidated ROIC was 15 percent for the full year," Koushik Chatterjee, executive director and chief financial officer of the company said.
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