Tata Steel stock was the top gainer on stocks exchanges during Tuesday's trading session after the company recorded a healthy performance from India business during September 2020 (Q2FY21) quarter.
Although Tata Steel's bottom-line came in lower, the top-line front saw growth on the back broad-based volume growth which also resulted in strong cash flow.
Investors also remain upbeat on Tata Steel's commitment to exploring future strategy in Netherlands and UK business, and also in deleveraging $1B annually.
During Q2FY21, the company's consolidated net profit has declined by 62.69% to Rs1,546.28cr from Rs4,144.71cr a year ago same period. Consolidated revenue from operations increased by 7.44% yoy to Rs37,153cr in the quarter review.
T V Narendran, CEO & Managing Director said, "Tata Steel has delivered strong results in India with broad-based, market-leading volume growth and strong cash flow generation."
The company's Free Cash Flow during the quarter was at Rs7,832cr. Tata Steel remains committed in deleveraging of $1B annually and has reduced net debt by Rs8,197cr in the latest quarter.
Quarterly deliveries at India operations grew 72% Quarter on Quarter and 22% Year on Year.
Tata Steel said, "The company has initiated discussions with SSAB Sweden based on interest received for the potential acquisition of Tata Steel’s Netherland business including Ijmuiden steelworks. The company has also commenced discussions with the Supervisory Board and Board of Management of Tata Steel Netherlands and the process will move to the next stage including due diligence and stakeholders’ consultations. The company is committed to deploying proceeds of any strategic restructuring towards additional deleveraging of the balance sheet."
Further, Tata Steel added, "The company has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for the Netherlands and UK business in the future. Tata Steel continues its dialogue with the UK Government on potential measures to safeguard the long-term future of Tata Steel UK and is also reviewing all options to make the business self-sustaining without the need for any funding support from Tata Steel India in the future."
At around 10.16 am, Tata Steel was trading at Rs521.20 per piece up Rs29.10 or 5.91% on Sensex. The stock has also touched a 52-week high of Rs523.15 per piece in early deals on Sensex.