Domestic steel major Tata Steel on Thursday posted a consolidated net loss of ₹4,648.13 crore for the June quarter. It reported a net profit of ₹714.03 crore for the corresponding quarter last year. The total revenue from operations fell to ₹24,288.51 crore in Q1 FY21 against ₹33,769.95 crore sequentially and ₹35,947.11 crore year-on-year.
The company said its operating level has recovered to 90% by June 30 and has since then increased further to 95 percent, catering to both domestic and export customers.
"India average steel realizations were lower due to the COVID impact during the quarter and about ₹2,000 crores of costs were under absorbed due to the lower volumes and have been charged to the profit and loss account," the company said.
On a standalone basis, the company reported a profit of ₹1,193.27 crore for Q1 FY21 against a profit of ₹1,538.99 crore YoY and a loss of ₹436.83 crore QoQ.
Commenting on the quarterly performance, T V Narendran, CEO & Managing Director, said: "During the quarter, we recalibrated our operations and our sales across geographies in line with underlying regulatory and market conditions. While this had an adverse impact on our volumes and our margins, we were successful in mitigating the impact as we pivoted the business towards export markets and successfully generated free cashflows despite adverse market conditions."
Tata Steel said that despite the drop in margins, there was a reduction in net debt of ₹1,677 crore in India, including a reduction of ₹577 crore and ₹291 crore, respectively, at Tata Steel BSL and Tata Steel Long Products. The company said, given the uncertain economic environment, it has built up a liquidity buffer of ₹20,144 crore, including ₹14,178 crore of cash and cash equivalents.
On company's future outlook, the steel major said: "Given that the severity and length of the downturn in steel demand on account of the pandemic remains unpredictable, the directors of TSE observed that while there is a reasonable expectation that TSE has the adequate resources to continue operating for the foreseeable future and that the going concern basis for the preparation of its financial statements remains appropriate, there exists a material uncertainty surrounding the impact of the COVID-19 pandemic on its financial situation."
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