Tata Steel, India's largest steelmaker, is scheduled to announce its first-quarter results for FY2024 in this week. Analysts are expecting the company to report strong earnings growth, driven by robust sales and margin expansion.
Tata Steel is expected to report strong earnings growth in the first quarter of FY2024, driven by robust sales and margin expansion. The company's domestic sales are expected to grow by 15-20% year-on-year, while its exports are also expected to grow. The company's operating margin is expected to improve by 150-200 basis points year-on-year, driven by the favorable product mix and the cost savings from its new manufacturing facility in Odisha.
Aniket Mhatre, Instl Research Analyst at HDFC Securities said, "All the players will see a very phenomenal margin improvement for the simple reason that for the last few quarters we have been seeing raw material decline. Most of the key raw materials have declined anywhere between 5-22 percent on a YoY basis. So on a YoY basis you will see all players reporting very healthy margins, but on a sequential basis, you will see players like two-wheelers or even passenger vehicles report the margin improvement on the relative basis."
Tata Steel's sales are expected to grow in the first quarter. The company's domestic sales are expected to grow by 15-20% year-on-year, driven by strong demand for its products in the construction and infrastructure sectors. The company's exports are also expected to grow, driven by the increasing demand for its products in international markets, such as Europe and China. The company is well-positioned to benefit from the growing demand for steel in India and the increasing exports of its products.
The government's infrastructure push and the increasing demand for steel from the real estate sector. Tata Steel's margin is also expected to expand in the first quarter due to the favorable product mix and the cost savings from its new manufacturing facility in Odisha. The company's product mix is expected to improve in the first quarter, as it will be selling more value-added products, such as cold-rolled coils and galvanized sheets. The company's cost savings are also expected to improve in the first quarter, as it will be able to benefit from the economies of scale at its new manufacturing facility.
Tata Steel is well-positioned for growth in the rest of FY2024. The company is expected to benefit from the growing demand for steel in India and the increasing exports of its products. However, there are some risks to the company's outlook, such as the slowdown in the Indian economy and the rising cost of raw materials.
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Published: 23 Jul 2023, 06:13 PM IST
