Tata Steel clocks highest-ever operating profit at Rs 17,810 crore

Tata Steel reported a consolidated net profit of Rs 12,548 crore against Rs 1,665 crore in the previous year. It reported a net profit of Rs 9,768 crore in the quarter ended June. In the year-ago period, Tata Steel’s operating profit was Rs 5,527 crore.

“Our steel deliveries in India expanded 11 per cent despite a contraction in market demand…We are watchful of the elevated coal prices and high energy cost as key risks to margins going forward,” the company’s managing director T.V.Narendran said.

Tata Steel’s revenue from operations, at Rs 60,282 crore, climbed 55 per cent. The consolidated expenses during the quarter went up 27 per cent YoY to Rs 47,135 crore. Its overall deliveries increased 11 per centQoQ to 4.58 mn tons.

“Sales volume to the Automotive segment increased 18 per cent QoQ …and we exported around 16 per cent of the sales during the September quarter,” Narendran said.

The company’s standalone earnings before interest taxes, depreciation and amortization were at Rs 13,877 crore.

Tata Steel’s gross debt declined to Rs.78,163 crore with repayments of Rs.11,424 crore in the first half of FY22. Net debt declined to Rs.68,860 crore. Net debt to EBITDA improved to 1.21 times. The company’s Consolidated Free Cash Flow was at Rs.3,322 crore during 2QFY22.

“We were able to reduce around Rs 11,400 crore in the first half of FY 22, while we have set a target to deleverage by at least $1 billion a year, we estimate reducing more than that this year,” said T.V.Narendran.

Tata Steel India operations reported a revenue of Rs 32,582 crore, up 50 per cent YoY. The company’s subsidiary Tata Steel Long Products segment reported a revenue of Rs 1,637 crore and the European operations reported a revenue of Rs 21,424 crore, up almost 59 per cent YoY.

“Revenues at Tata Steel Europe increased by 11 per cent QoQ and EBITDA improved 2.2x QoQ to £328 million which translates to an EBITDA per ton of £153,” the company said in its media statement.

Tata Steel is also pursuing the hydrogen route in IJmuiden and a detailed assessment is underway, Narendran said. “This involves the introduction of direct reduced iron (DRI) technology which can make iron using natural gas or hydrogen before it is converted to steel,” he said.

The company has also commissioned a 5 TPD CO2 capture plant at Jamshedpur.

The company spent around Rs.2,191 crore on CAPEX during the quarter for the work on the Pellet plant, the Cold Roll Mill complex and the 5 MTPA expansion at Kalinganagar is ongoing.

The company has recently won the Gandhalpada iron ore mines in Odisha at a premium of 141.25 per cent.

“This will help us achieve raw material security beyond 2030,” the company said.