Anand Rathi
Tata Steel (Buy)
Target: ₹1,437
CMP: ₹1,178.65
Tata Steel consolidated revenue for Q4-FY21, increased by 19 per cent q-o-q and 39 per cent y-o-y to ₹49,980 crore. EBITDA grew by about 48 per cent q-o-q and 204.9 per cent y-o-y ₹14,180 crore with strong underlying performance in both India and Europe.
India operations, which includes standalone Tata Steel BSL and Tata Steel Long Products, generated revenues of ₹30,100 crore, which translated to a 19 per cent q-o-q and 54 per cent y-o-y growth.
During the quarter, company achieved best ever quarterly crude steel production of 4.75 million tons in India. So, FY21 production was lower due to the pandemic driven disruptions in the first quarter. However, company achieved highest ever annual delivery volumes of 17.31 million tons in India and a quarterly deliveries improved 16 per cent on year-on-year basis to 4.67 million tons. In Q4-FY21, management achieved highest ever quarterly delivery volumes in Automotive and Special Products segment.
Company delivered strong financial performance with strong revenue growth and margin expansion along with solid free cash flow. Strong recovery in India business, efficient working capital management coupled with sharp capital allocation should improve prospects further.