Tata Steel may report over Rs 2\,000 crore net loss in Q1

Tata Steel is likely to post a consolidated loss of over Rs 2,000 crore in the June quarter due to sharp reduction in realisation in the India business and lower volume at all business segments.

Edelweiss Securities believes the metal major may report a net loss of Rs 2,393 crore on 34.50 per cent fall in top line. The brokerage firm also sees a steep 96 per cent YoY dip in EBITDA in Q1FY21.

Shares of Tata Steel traded 1.12 per cent down at Rs 419 ahead of financial results later in the day.

In general, the nationwide lockdown from March 24 following Covid-19 outbreak led to significant demand destruction in Q1FY21, forcing many steel companies to operate at sub-optimal levels during April-May.

Overall domestic steel demand fell by around 56 per cent YoY, forcing steel mills to find refuge in exports which impacted the blended realisations severely.

An assessment by Phillip Capital shows that the metal major may report a consolidated loss of Rs 2,042 crore on 31.60 per cent and 65.20 per cent drop in revenue and EBITDA. It also sees 23.30 per cent YoY drop in volumes at 4.9 million tonnes.

The brokerage believes that Indian realisation to be lower by around Rs 4,500 per tonne. Overall the spread is expected to fall in India and Europe business may report EBITDA losses.