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Steel News November 01, 2023 07:50:59 AM

Tata Steel Q2 Results: European Operations to Hit Profitability, Sales May Fall 4-11%

Paul Ploumis
ScrapMonster Author
Kotak Institutional Equities sees a loss of Rs 151.90 crore for the quarter. It sees sales for Tata Steel to drop 4.6 per cent YoY to Rs 57,114.60 crore.
Tata Steel Q2 Results: European Operations to Hit Profitability, Sales May Fall 4-11%

SEATTLE (Scrap Monster): Tata Steel Ltd, a Tata group firm, is likely to report a sharp fall in profitability in the September quarter on a single digit drop in year-on-year (YoY) sales. Analysts said Tata Steel's numbers would be weakest among peers on account of Tata Steel Europe Ebitda losses led by poor volumes and realisation . Investors would await the management commentary on UK operations and its guidance on average selling price (ASP) and cost of production across geographies. They would also wish to be updated on debt reduction and capex timeline, as Tata Steel looks to double the domestic capacity by FY30.

Motilal Oswal Securities expects that Tata group entity to report 61.1 per cent YoY plunge in profit at Rs 596.90 crore on a 5.7 per cent YoY drop in sales at Rs 56,472.20 crore. Ebitda is seen falling 30 per cent YoY to Rs 4,242.80 crore.

Kotak Institutional Equities sees a loss of Rs 151.90 crore for the quarter. It sees sales for Tata Steel to drop 4.6 per cent YoY to Rs 57,114.60 crore.

"We expect steel realisations to decline by 3.5 per cent QoQ (flat YoY) on account of price cuts during the start of quarter and lower exit price of previous quarter. We expect standalone volumes to decline by 2 per cent YoY (1 per cent QoQ) to 4.66 million tonnes. India Ebitda per tonne would increase by 3 per cent QoQ to Rs 14,481 per tonne (up 78 per cent YoY) led by lower coking coal costs, partly offset by lower realisations," Kotak said.

The brokerage expects Europe to report Ebitda loss of $142 per tonne (down $96 per tonne in 1QFY24) led by price weakness and higher fixed costs, partially offset by lower raw material costs.

Steel prices remained firm on higher demand but prices of coking coal are up 40 per cent since July lows. Prabhudas Lilladher sees profit falling 97.4 per cent to Rs 33.7 crore. It pegs sales at Rs 52,769.30 crore, down 11.3 per cent YoY.

"We expect 4 per cent QoQ decline in NSR as steel prices had fallen sharply post 4QFY23; volume to remain flattish QoQ at 4.82 million tonnes ; Ebitda per tonne may see improvement of Rs 700 QoQ to Rs 14,200. TSE contribution to deteriorate QoQ as European prices has fallen 7-8 per cent QoQ and weak volumes (down 11 per cent QoQ); TSUK to drag subsidiaries Ebitda loss QoQ to over $150 per tonne," PL said.

Courtesy: www.businesstoday.in

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