The country’s second-largest producer of the construction material clocked a consolidated net profit of Rs 2,730 crore for the three months ended December 31 compared to Rs 295 crore a year earlier. Consolidated revenue from operations rose to Rs 57,002 crore from Rs 53,648 crore.
Earnings before interest, tax, depreciation and amortisation or Ebitda climbed 39% on-year to Rs 8,309 crore, while Ebitda made on each tonne of steel sold rose to Rs 10,116 from Rs 7,759 a year ago, according to a company statement.
“Our global operating environment continues to be shaped by tariffs, geopolitical shifts and policy divergence,” said TV Narendran, Tata Steel’s chief executive. “Steel markets were impacted by elevated finished steel exports from China, which at 119 million tons surpassed the 2015 peak.”
Tata Steel’s performance against this backdrop was “strong”, said Narendran, with the company surpassing six million tonnes of domestic steel deliveries, a record for a quarter. For overseas operations, meanwhile, supportive policy frameworks are “vital” to transition to a more sustainable operating model, he said.
“While the recent progress in Europe has supported sentiment, the UK market continues to be depressed, and the quota framework needs to be revised to reflect underlying market conditions,” said Narendran.
Despite the challenging operating environment, Tata Steel reduced its consolidated net debt to Rs 81,834 crore from Rs 87,040 crores as of September-end. It spent Rs 3,291 crores on capital expenditure during the December quarter.“Our cost transformation programme, focused on multiple levers including operating KPIs, supply chain efficiencies and procurement, has delivered savings of around Rs 3,000 crores for the quarter and around Rs 8,600 crores for the first nine months of the financial year,” said Koushik Chatterjee, chief financial officer.
REGIONAL PERFORMANCE
Indian operations, the mainstay for Tata Steel, saw profit drop a tad to Rs 3,823 crore from Rs 3,865 crore a year ago. Even though deliveries during the quarter increased on-year, lower steel prices and provisioning for the new labour codes weighed on profits.
In the Netherlands, Tata Steel recorded an Ebitda of Rs 570 crore, compared to a net loss of Rs 9 crore in the year-ago period, while in the UK, operating loss widened to Rs 742 crore from Rs 730 crore.
Ahead of the earnings, shares of Tata Steel closed almost unchanged at Rs 197.05 apiece on the BSE.