Tata Steel share price trades flat after weak Q2 results; here’s what analysts say

The street was expecting that the Tata Group company would post a sharp drop in earnings for the FY24 quarter ending in July–September. In fact, because of lower average selling prices (ASP) brought on by lower ferrous prices, as well as less seasonal demand, the whole steel industry is predicted to record mixed results in Q2FY24. Analysts noted that cheaper coking coal prices will, however, somewhat offset this decrease.

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The steel maker had reported a consolidated net profit of ₹633.95 crore in the September quarter of FY23. Its total revenue from operations declined by 7% YoY to ₹55,681.93 crore in September quarter of FY24, against ₹59,877.52 crore in the September quarter of FY23.

For the quarter ended September, the company reported an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of ₹4,315 crore, while margins were at ₹8%, as per the company’s release. 

Also Read: Tata Steel Q2 results: Company reports net loss of ₹6,196 crore

For the quarter, the company spent ₹4,553 crores on capital expenditures, and for the half-year, it spent ₹8,642 crores. The 0.75 MTPA EAF project in Punjab and the 5 MTPA extension at Kalinganagar are now being implemented.

“Tata Steel Consolidated revenues for the quarter stood at ₹55,682 crores and consolidated EBITDA stood at ₹4,315 crores, which translates to an EBITDA margin of 8%. India business generated higher margin of around 20% and EBITDA stood at ₹6,841 crores. In Europe, margins moderated especially in UK business while Netherlands business was broadly stable on QoQ basis. Revenue per ton was lower in both geographies. However, improved costs in Netherlands led to broadly similar margins. 

Cash flow from operations before interest stood at ₹4,658 crores driven by favourable working capital movement. Our capital expenditure was ₹4,553 crores during the quarter and ₹8,642 crores for the half year. This is broadly in line with our annual guidance of about ₹16,000 crores for FY2024 and we continue to prioritise completion of the 5 MTPA Kalinganagar expansion,” said Koushik Chatterjee, Executive Director and Chief Financial Office in a release. 

(more to come) 

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Updated: 02 Nov 2023, 09:29 AM IST