Advertisement

Home / Business / Tata Steel posts consolidated net profit of Rs 9,768.34 crore

Tata Steel posts consolidated net profit of Rs 9,768.34 crore

The highest quarterly profit came despite the fact that deliveries in India were lower in the first quarter because of disruptions linked to the Covid second wave
Representational image.
Representational image.
Shutterstock

Our Special Correspondent   |   Calcutta   |   Published 13.08.21, 03:24 AM

Tata Steel Ltd posted a consolidated net profit of Rs 9,768.34 crore in the first three months of this financial year, surpassing the profit earned in the whole of 2020-21.

Backed by improved profitability of the chronically weak European business and an all-round performance of the intrinsically strong Indian operations, Tata Steel continued to deleverage the balance sheet by Rs 5,894 crore and widened the full-year target of reducing debt by at least $2 billion, doubling the target set previously.

Advertisement

The highest quarterly profit came despite the fact that deliveries in India were lower in the first quarter because of disruptions linked to the second wave of Covid. Total income more than doubled over the same period last year to Rs 53,534 crore and it was also higher quarter-on-quarter (QoQ). 

Tata Steel had reported a loss of Rs 4,648 crore in the first quarter of the last fiscal. Profit after tax stood at Rs 7,162 crore in the fourth quarter of 2020-21, indicating  a sequential jump in profitability in the April-June period. 

Tata Steel Europe also posted a 28 per cent QoQ jump in profitability, with EBIDTA growing to Rs 1,533 crore from Rs 1,194 crore in the fourth quarter. It had a negative EBIDTA of Rs 626 crore in the same period last year.

T.V. Narendran, CEO and MD of Tata Steel, said Indian markets were adversely impacted by the second wave. “Demand has begun recovering in India, though domestic steel prices continue to be at a steep discount to China import parity prices,” Narendran said.

The buoyant market also encouraged the company to fast track the 5-million-tonne expansion of the second phase of the Kalinganagar unit. “We have accelerated capex allocation for the 6mtpa pellet plant and the CRM complex. Both are expected to be commissioned by the first half of 2022,” Narendran added.

Koushik Chatterjee, executive director and CFO, indicated that the impact of the rising steel spread in Europe is expected to have a positive impact in the coming quarters. Net debt to equity is less than 1x, while net debt to EBITDA is now down to 1.59x, he added. “Despite the increase in working capital due to higher prices of both steel and raw material, the company generated consolidated free cash flow of over Rs 3,500 crore during this quarter,” Chatterjee said.



Advertisement
Advertisement
Advertisement
 
 
 
Copyright © 2020 The Telegraph. All rights reserved.