Tata Group-backed
Tata Steel witnessed better-than-expected December 2020 (Q3FY21) corporate earnings with steel demand improving sharply especially in India business. The company recorded the highest ever consolidated EBITDA of Rs9,540cr in Q3FY21 compared to Rs3,659cr a year ago same period.
Tata Steel's consolidated net profit was at Rs3,989cr in the quarter under review, compared to a loss of Rs1,166cr of December 2020. The company's consolidated turnover was at Rs39,594cr in Q3FY21 11.5% from Rs35,520cr in the corresponding period of the previous year.
Koushik Chatterjee, Executive Director and CFO said, "Continuing with the recovery from the deep impact of the pandemic in the first quarter of the financial year, Tata Steel has delivered one of the best financial performance during this quarter with the highest ever consolidated EBITDA of Rs.9,540 crores and free cash flows of over Rs 12,000 crores on the back of strong underlying operating performance of the India business, sharp focus on capital allocation and working capital management. All our operating hubs in India have performed exceptionally well with the stand-alone EBIDTA margin at 37.5%. Our key subsidiaries Tata Steel BSL and Tata Steel Long Products have also reported the highest ever profitability in recent years."
Here's how India operations stood in Q3FY21:
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Crude steel production remained strong at 4.60 mn tons; registered a 3%YoY growth in 3QFY21.
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Domestic deliveries grew 8%QoQ and 4%YoY to 4.16 mn tons. Exports shrank below 11% of overall deliveries. Sales witnessed strong momentum but were constrained by lower opening inventory.
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Achieved the highest ever quarterly EBITDA of Rs.8,811 crores with 46%QoQ and 2.14x YoY growth; driven by higher prices, better product mix, lower exports and operating efficiency initiatives. This translates into an EBITDA per ton of Rs.18,931 and an EBITDA margin of 34.9%.
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Tata Steel standalone achieved the highest ever quarterly EBITDA Rs6,737cr with 43%QoQ and 78%YoY growth. This translates into an EBITDA per ton of Rs.20,175 and an EBITDA margin of 37.5%.
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Key Indian subsidiaries also delivered a robust financial performance with Tata Steel BSL and Tata Steel Long Products generating an EBITDA of Rs1,634cr and Rs440cr during the quarter. This translates into an EBITDA/t of Rs14,223 and Rs26,471, respectively.
Tata Steel said that Tata Steel BSL merger with Tata Steel is progressing ahead. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products is also underway.
Chatterjee added, "Our enterprise strategy on debt management continues to be on target. After a reduction in net debt by Rs8,285cr in the first half which surpassed our annual de-leveraging target of $1 billion, we continued to aggressively reduce our net debt by Rs10,325cr and gross debt by Rs5,640cr during the quarter, taking the nine-month reduction in net debt by Rs18,609cr and gross debt by Rs7,649cr. This has significantly improved the credit metrics of the company. Our cash flow generation remains strong and in addition to the deleveraging in the first nine months, we will further reduce the gross debt by more than Rs12,000cr in the fourth quarter of the current financial year. We have restarted allocating capital on margin expansionary growth projects in India within the contours of the targeted financial framework.”
Further, Tata Steel highlights that the company continues to prioritize on capital expenditure; it spent Rs1,394cr on CAPEX during the quarter. The Company has decided to restart work on Pellet plant and Cold Roll Mill complex at Tata Steel Kalinganagar. Both the Pellet plant and Cold Roll Mill complex, once completed, will expand margin.
At around 10.47 am, Tata Steel was trading at Rs682.10 per piece down by Rs17.45 or 2.49% on Sensex. The stock has touched an intraday low of Rs681 per piece.