The country’s largest private sector steel manufacturer – Tata steel, delivered its results for the third quarter of FY22 on February 4, 2022.
In line with market expectations, Tata steel reported its consolidated net profit at Rs. 9,598 crores, a stellar growth of 159% YoY from Rs. 4,011 crores in the year ago period. The steel giant’s revenue from operations grew nearly 45% from Rs. 41,935 crores to Rs. 60,783 crores YoY.
The company’s consolidated EBITDA stood at Rs. 15,853 crores, up a mammoth 89% from Rs. 8,394 crores last year. Tata group confirmed that it spent Rs. 2,790 crores on Capex for this quarter. Net debt declined for the company, standing at Rs. 62,869 crores. As a result, Net Debt/EBITDA fell below 1.
For the India operation, crude steel production grew 2% QoQ and 4% YoY to 4.81 million tons. Auto OEM production dropped 9% due to semiconductor storage. For Europe business, revenues rose 7% QoQ and an impressive 56% YoY to £2,246 million in Q3.
Ahead of the results, Tata Steel shares closed ~0.67% higher, settling at Rs. 1,174 on NSE. Just in the past 12 months, the stock has gained nearly 71.43%.
Mr. T V Narendran, Chief Executive Officer & Managing Director, expressed in a press release that India’s steel demand has begun to improve on the back of continued economic recovery as 3rd wave of COVID begins to ebb. Tata’s steel deliveries in India expanded by 4% in the first nine months of the financial year along with an improvement in product mix.
He added that Tata shall continue to drive value accretive growth in chosen segments. Performance in key segments such as auto was robust despite the sector being impacted by the semiconductor shortage. European operations continued to perform underpinned by strong improvement in realizations. Tata Steel continues to progress on stated goals.
Mr. Narendran expressed that Tata Steel became the first company in the world to conduct trials to inject Coal Bed Methane gas into a Blast Furnace in a bid to reduce emissions. Tata’s 5 MTPA TSK phase II expansion including the pellet plant and CRM complex is also progressing well. This, the company believes, will enable them to significantly ramp up their long products portfolio and benefit from the growth in infrastructure in India and retail housing growth in semi urban India. Tata Steel will leverage their retail brands and pan India distribution network to drive scale, profitability and cash flows.
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Research Analyst: Bavadharini KS