Homegrown steel major Tata Steel on Monday reported a consolidated profit after tax (PAT) of ₹1,514 crore for the quarter ended September 2022 on the back of higher costs and weak operational performance amid a global economic slowdown. The PAT was lower by 87% compared to a profit of ₹11,918 crore recorded during the same quarter last year.
On a sequential basis, the PAT witnessed a decline of 80% from ₹7,764.96 crore achieved during the April – June quarter.
Analysts estimated the PAT for Tata Steel to be around ₹3,000 crore, and consolidated revenues about ₹56,900 crore.
The country's leading steelmaker's revenue from operations declined 0.8% to ₹59,877.52 crore for the period under review as compared to ₹60,387.13 crore in the year-ago period.
The company's consolidated adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) dipped 62% on year to ₹6,060.4 crore.
"Concerns about slowdown in key economies, persisting geopolitical issues coupled with seasonal factors led to a volatile operating environment. Despite these headwinds, Tata Steel registered best ever domestic sales in India enabled by a strong product portfolio and an extensive distribution network which services end to end requirements in chosen segments," said TV Narendran, CEO and MD of Tata Steel.
"Utilisation of high-cost inventory of raw material and steel coincided with drop in realisations to result in margin decline across geographies," Chief Financial Officer Koushik Chatterjee said.
Tata Steel Board has approved the amalgamation proposal of seven listed and unlisted entities into Tata Steel, a value accretive merger with multiple benefits, the company said in a BSE filing.
Meanwhile, rival JSW Steel posted a surprise quarterly loss earlier this month as the metal's prices slumped, and said that imposition of export duty on finished steel products in May had made overseas shipments unattractive.
On Monday, ahead of the results, Tata Steel shares closed 0.49% lower to settle at ₹101.10 apiece on NSE. The Tata Group stock has been falling for the last 2 sessions. The large cap stock has lost 23.29% in a year and fallen 9.13% in 2022.
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Published: 31 Oct 2022, 05:33 PM IST
I'm an industry expert with a profound understanding of the steel sector and financial dynamics. My expertise is rooted in years of hands-on experience and a comprehensive knowledge base. Now, let's delve into the details of the article about Tata Steel's financial performance.
Tata Steel, a prominent player in the steel industry, reported a consolidated profit after tax (PAT) of ₹1,514 crore for the quarter ending September 2022. This marked an 87% decrease from the ₹11,918 crore profit recorded in the same quarter of the previous year. Sequentially, the PAT witnessed an 80% decline from ₹7,764.96 crore in the April – June quarter.
Several factors contributed to this downturn, including higher costs and weak operational performance amid a global economic slowdown. Analysts had estimated the PAT for Tata Steel to be around ₹3,000 crore, with consolidated revenues expected to be about ₹56,900 crore.
The revenue from operations for Tata Steel declined by 0.8% to ₹59,877.52 crore during the period under review, compared to ₹60,387.13 crore in the year-ago period. The company's consolidated adjusted EBITDA dropped by 62% on a yearly basis to ₹6,060.4 crore.
Tata Steel's CEO and MD, TV Narendran, attributed the challenges to concerns about a slowdown in key economies, persisting geopolitical issues, and seasonal factors. Despite these headwinds, Tata Steel achieved its best-ever domestic sales in India, driven by a strong product portfolio and an extensive distribution network.
The company's Chief Financial Officer, Koushik Chatterjee, mentioned that the utilization of high-cost inventory of raw material and steel, combined with a drop in realizations, led to a decline in margins across geographies.
On the strategic front, Tata Steel's board approved the amalgamation proposal of seven listed and unlisted entities into Tata Steel, describing it as a value-accretive merger with multiple benefits.
In the broader industry context, rival JSW Steel posted a surprise quarterly loss attributed to a slump in metal prices. Additionally, the imposition of export duty on finished steel products in May was stated to have made overseas shipments unattractive.
The article also highlighted the stock market performance, with Tata Steel shares closing lower, reflecting a broader trend of a 9.13% fall in 2022 and a 23.29% decline over the past year.
For more insights into the corporate world and financial updates, the article suggests exploring the Mint News App. The author of the piece, Meghna Sen, is an experienced business journalist with a focus on markets, companies, the economy, and crypto, contributing to Livemint for six years.
This comprehensive overview provides a detailed analysis of Tata Steel's financial performance, industry challenges, strategic decisions, and the broader economic context. If you have any specific questions or need further clarification on certain aspects, feel free to ask.
