Tata Steel PAT up 139% to Rs 9,598 cr in Dec qtr on economic recovery

Tata Steel, the country’s oldest steel producer, reported a consolidated profit after tax (PAT) of Rs 9,598 crore in the December quarter (Q3), up 139 per cent from the corresponding period last year. It reported a profit after tax (PAT) of Rs 4,011 crore in the year-ago period.

Consolidated Ebitda (earnings before interest, taxes, depreciation, and amortisation) at Rs 15,853 crore was higher by 64 per cent year-on-year (YoY).

Taking advantage of strong cash flows, the company made debt repayment of Rs 17,376 crore in the first nine months of the financial year, bringing gross debt down to Rs 72,603 crore and net debt to Rs 62,869 crore.

Consolidated turnover was Rs 60,783 crore in the quarter, compared with Rs 41,935 crore a year back. Sequentially, the turnover was almost flat, while net profit dipped as steel prices moderated. Turnover in the previous quarter was Rs 60,387 crore and PAT was Rs 12,548 crore.

Tata Steel said consolidated revenues were broadly stable on a quarter-on-quarter (QoQ) basis as improvement in net realisations more than offset the drop in volumes.

Consolidated deliveries in Q3FY22 stood at 7.01 million tonnes (MT), compared with 7.41 MT a year back and 7.39 MT in the previous quarter.

Revenues from European operations increased 7 per cent QoQ and 56 per cent YoY to £2,246 million in Q3FY22; Ebitda was at £290 million, which translates to an Ebitda per tonne of £134.

T V Narendran, chief executive officer and managing director, said the European operations continued to perform, underpinned by strong improvement in realisations.

On India, he said, steel demand has begun to improve on the back of continued economic recovery. “Our steel deliveries in India expanded by 4 per cent in the first nine months of the financial year along with an improvement in product mix,” he added.

Koushik Chatterjee, executive director and chief financial officer, Tata Steel, said the firm generated strong free cash flow of Rs 6,338 crore for the quarter, which was used to reduce the debt.

Tata Steel Long Products, a subsidiary, was recently declared the winning bidder for acquisition of Neelachal Ispat Nigam.

The acquisition, Chatterjee said, would be financed by Tata Steel largely through a combination of internal accruals and bridge funding. However, he also said the company would remain focused on its enterprise strategy to deleverage its balance sheet while it pursues its growth priorities.

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