Shares of Tata Steel are in focus today as the steelmaker will announce its earnings for the quarter and fiscal ended March 2023. The metal stock rose was quoting at Rs 108.60 on the NSE, higher by 0.7 per cent from the previous close.
According to analysts, the company’s net profit is expected to drop over 91 per cent year-on-year to Rs 955 crore due to weak performance in the Europe business, as per brokerages. However, India business performance is expected to be strong.
Earlier this month, Tata Steel said it recorded a 3 per cent rise in consolidated steel production at 7.77 million tonne (mt) in the March quarter. The company’s total steel output stood at 7.55 mt in the year-ago period. The steel maker added that its India unit achieved crude steel production of 5.15 mt for the quarter, up 3 per cent sequentially.
On the other hand, Tata Steel Europe’s steel deliveries rose 7 per cent sequentially to 2.13 mt on improved demand environment but its product mix was affected due to the upgradation at CM21 (Cold Rolling mill).
ICICI Securities said it sees Tata Steel’s standalone operations to report an Ebitda per tonne of Rs 13,250 per tonne compared with Rs 11,350 per tonne in Q3FY23. For Q4FY23, it expects European operations to report a loss at the Ebitda per tonne level. For Q4FY23E, European operations are likely to report negative Ebitda per tonne of $110, it said.
“For Q4FY23E, on a consolidated basis, top line is expected to decline 14 per cent YoY but rise 5 per cent QoQ to Rs 59,854 crore. Tata Steel’s consolidated Ebitda for Q4FY23E is expected to increase 32 per cent QoQ to Rs 53,64 crore. Consolidated Ebitda margins for Q4FY23E are likely to come in at 9 per cent compared to 7.1 per cent in Q3FY23. Ensuing consolidated PAT for Q4FY23E is likely to come in at Rs 443 crore, down 95 per cent,” ICICI Securities said.
Tata Steel shares have dropped 10 per cent this year so far. This is against a 6 per cent fall in the BSE Metals index. In the last five days, the stock is up 2 per cent against a 1.3 per cent rise in the benchmark index.
Nuvama expects Tata Steel’s profit at Rs 192.20 crore against Rs 10,030 crore, down 98 percent YoY. It sees sales at Rs 59,299 crore, down 14.5 per cent YoY.
“We expect Tata standalone Ebitda per tonne to increase by 35 per cent QoQ to Rs 13,998/tonne owing to improvement in realisation and volume and a 10 per tonne QoQ dip in coking coal price. Tata steel Europe may report a negative Ebitda per tonne of $107 per tonne compared to minus $95 per tonne in Q3FY23 due to lower realisation, partly offset by lower CoP,” Nuvama said.
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