Tata Steel reported 7.45% rise in Sep-20 quarter top line sales revenues yoy at Rs37,154cr. After the steel fall in steel demand in the Jun-20 quarter, the overall steel revenues bettered the pre-COVID levels supported by a smart revival in domestic demand as well as strong traction seen with regards to steel imports from the rest o Asia.
For the Sep-20 quarter, the operating profits were up 137.5% at Rs4,020cr. This was predicated on the ability of the company to rein in costs as the cost of raw materials consumed was lower by almost 20% yoy. This resulted in the operating margin or OPM improving from 4.89% in the Sep-19 quarter to 10.82% in Sep-20 quarter.
Profit after tax (PAT) for the Sep-20 quarter was down 59.5% at Rs1,635cr. It must be noted that this fall is purely due to an Rs4,365cr deferred tax credit in the Sep-19 quarter, in the absence of which the company would have reported a net loss in Sep-19 quarter. PAT margins fell from 11.69% to 4.40% in Q2 due to the deferred tax credit in Sep-19 quarter.
Financial highlights for Sep-20 compared yoy and sequentially
|
|
Tata Steel |
|
|
|
|
|
Rs in Crore |
Sep-20 |
Sep-19 |
YOY |
Jun-20 |
QOQ |
|
Revenues |
37,154 |
34,579 |
7.45% |
24,289 |
52.97% |
|
Operating Profit |
4,020 |
1,692 |
137.51% |
-1,605 |
Not Relevant |
|
Profit After Tax (PAT) |
1,635 |
4,043 |
-59.55% |
-4,609 |
Not Relevant |
|
|
|
|
|
|
|
|
Diluted EPS (Rs) |
₹ 13.07 |
₹ 35.71 |
|
₹ -38.64 |
|
|
Operating Margins |
10.82% |
4.89% |
|
-6.61% |
|
|
PAT Margins |
4.40% |
11.69% |
|
-18.98% |
|
Key takeaways from the Sep-20 quarter results
-
The operating profit growth was on the back of better operating metrics including the sharp fall in raw material costs. The net profit fall was purely due to the impact of the deferred tax credit in Sep-19 quarter and hence strictly not comparable.
-
Out of the total revenues of Tata Steel for the Sep-20 quarter, Tata Steel India accounted for 36% while Tata Steel Europe accounted for 30%. The balance was accounted for by steel trading as well Tata Steel’s recent NCLT acquisitions like Tata Steel Long Products and Tata Steel BSL.
Related Tags: