Consolidated PAT for Tata Steel’s second quarter fell 87% to 1,514 crore, below estimates | INFOCOTE

Consolidated PAT for Tata Steel’s second quarter fell 87% to 1,514 crore, below estimates.

On the basis of rising expenses and subpar operational performance amid a worldwide economic slowdown, domestic steel giant Tata Steel on Monday declared a consolidated profit after tax (PAT) of 1,514 crore for the quarter ended September 2022. Compared to a profit of 11,918 crore made during the same quarter last year, the PAT was 87% lower.

Sequentially, the PAT dropped by 80% from the 7,764.96 crore realised during the April–June quarter.

Predictions

Analysts predicted that Tata Steel’s PAT would be approximately 3,000 crore and its combined revenues would be about 56,900 crore.

The top steel producer in the nation had a 0.8% drop in operating revenue to 59,877.52 crore for the reviewed period compared to 60,387.13 crore for the comparable period last year.

Earnings before interest, taxes, depreciation, and amortisation, or adjusted EBITDA, for the entire company fell 62% year over year to 6,060.4 crore.

“Seasonal conditions combined with worries about key economies slowing down and ongoing geopolitical crises created an unstable operating environment. Despite these obstacles, Tata Steel recorded its highest domestic sales ever in India thanks to a solid product line and a vast distribution network that caters to all needs in specific markets “Tata Steel’s CEO and MD, TV Narendran, said.

According to chief financial officer Koushik Chatterjee, the use of high-cost raw material and steel inventories combined with a dip in realisations caused margins to decline globally.

According to a BSE statement by the business, the Tata Steel Board has authorised the merger of seven listed and unlisted companies with Tata Steel, which will add value and have a number of advantages.

As the price of the metal dropped, competitor JSW Steel reported a surprising quarterly loss earlier this month and said that the May export levy on finished steel products had made international shipments unprofitable.

Tata Steel shares finished 0.49% lower on Monday to settle at 101.10 a share on the NSE, ahead of the results. For the past two sessions, the Tata Group stock has been declining. The large cap stock has dropped 9.13% in 2022 after falling 23.29% in a year.

Conclusion

Tata Steel anticipates a reduction in China’s steel production due to the winter season, despite the government’s stimulus programmes helping to boost demand. The demand in India during the holiday season showed clear signs of improvement, and it is anticipated to continue to do so as important industries recover.

The prognosis for demand, steel pricing, and raw material prices in the European Union region, according to Tata Steel, was clouded by the geopolitical environment and inflation.

Tata Steel anticipates range-bound steel pricing in India due to a solid rebound in automotive demand as well as robustness in the rural and construction markets that will be restrained by global costs. Seasonality and recessionary fears are likely to have an impact on steel prices in Europe, although supply reductions should improve market balance.