Tata Steel reported a 54% surge in its December quarter net profit to ₹1,753 crore on increase in steel production following the acquisition of Bhushan Steel.
The rise in profit came on a 23% increase in revenue to ₹41,220 crore and 27% growth in adjusted EBITDA to ₹7,225 crore.
India footprint
“Tata Steel is committed to growing its India footprint while focusing on benchmark operational performance, superior market presence, strong customer relationships and sustainability,” said T. V. Narendran, CEO and managing director, Tata Steel, commenting on the results.
“Despite a sharp drop in international steel prices, we were able to maintain our overall realisations and increase our volumes significantly in India. The integration of Tata Steel BSL continues and our five MTPA expansion at Tata Steel Kalinganagar is also making good progress.”
India’ revenues recorded 41% growth to ₹22,063 crore compared with ₹15,596 crore in the year-earlier period as India’ steel production grew 34%YoY to 4.38 million tonne with the acquisition and ramp-up of Tata Steel BSL. India deliveries stood at 3.89 million tonne and now account for more than 55% of consolidated volumes.
Talking about the joint venture with ThyssenKrupp, Mr. Narendran said, “The phase II review of the TSE ThyssenKrupp JV is ongoing and we are closely working with the European Commission to facilitate the same. In line with our strategy of divesting non-core assets and focusing on India, we have announced a divestment of a 70% stake in our SEA business and we continue to work on exploring similar opportunities across our portfolio. We are also looking forward to enhancing our long products and downstream capability through the acquisition of the one1 MPTAmtpa steel business of Usha Martin.”
The company had ₹8,549 crore in cash and cash equivalents and ₹10,771 crore in undrawn bank lines.
Mr. Koushik Chatterjee, executive director and CFO, Tata Steel said, “The short-term finance taken for Tata Steel BSL acquisition has been refinanced with long-term loans of ₹15,500 crore. During the quarter, Tata Steel Group generated operating cash flows of ₹4,150 crore. Our consolidated gross debt has declined by ₹9,083 crore during the quarter including deleveraging of over ₹6,000 crore. We have repaid ₹3,000 crore from Tata Steel BSL since the acquisition as part of the overall deleveraging. The proceeds from the divestment of 70% of our stake in our South-east Asia business as well as from the sale of our residual holding in TRL Krosaki would be used for further deleveraging.”
Tata Steel shares on BSE closed down 3.7% to ₹469.55 in a weak Mumbai market on Friday.