Tata Steel shares dip 6% post Q4 results

Shares of Tata Steel fell as much as 6% on Thursday to become the top loser in the Nifty 50 Index after the Tata Group-owned steelmaker reported a 65% drop in its fourth-quarter net profit.

The stock opened at ₹172.90 compared to its previous closing price of ₹174.20 on the BSE. The counter hit an intraday low of ₹163.80. Tata Steel has gained 18% in 2024 and 54% over the past year.

Net profit Tata Steel fell 65% year-on-year to ₹555 crore for the quarter ended March compared with ₹1,566 crore in the corresponding quarter last year. For the full fiscal 2023-24, the steelmaker posted a net loss of ₹4,910 crore as compared to a net profit of ₹8,075 crore in FY23.

Revenue from operations fell nearly 7% year-on-year to ₹58,687 crore for the March quarter from ₹62,962 crore in the same quarter last year. For the full fiscal 2023-24, revenue dipped to ₹2,29,171 crore from ₹2,43,353 crore in FY23.

EBITDA (earnings before interest, taxes, depreciation, and amortisation) was at ₹6,631 crore during the fourth quarter with an EBITDA margin of 11%.

The company spent ₹4,850 crore on capital expenditure during the quarter and ₹18,207 crore for the full year. Tata Steel’s net debt stands at ₹77,550 crore.

India revenues were ₹1,42,902 crore for the full year and were marginally higher on a yearly basis. The company achieved the highest ever crude steel production of around 20.8 million tons as well as deliveries of around 19.9 mn tons. Domestic deliveries were up 9%. In India, EBITDA was higher by 10% YoY to ₹31,057 crore, which translates into an EBITDA margin of 22%.

UK annual revenues were 2,706 million pounds and EBITDA loss stood at 364 million pounds. Liquid steel production was 2.99 million tons while deliveries stood at 2.80 million tons. Netherlands annual revenues were 5,276 million pounds and EBITDA loss stood at 368 million pounds.

“FY2024 has been a year of progress for Tata Steel with transition towards stated goals in India and abroad despite the challenging operating environment. In India, which is a structurally attractive market, we have delivered improved margins and continued to expand our footprint in terms of volumes as well as product portfolio. Our domestic deliveries were best ever at around 19 million tons and were up 9% YoY with broad based improvement across chosen market segments. Automotive volumes were aided by higher deliveries of hot-rolled and cold-rolled steel to auto OEMs while our well-established retail brand Tata Tiscon crossed 2 million tons on an annual basis,” says T V Narendran, chief executive officer and managing director, Tata Steel.

Overall, India deliveries now make up 68% of total deliveries and will continue to grow with incremental volumes from 5 MTPA capacity expansion at Kalinganagar, says Narendran.

“With respect to the UK operations, we have decided to proceed with the proposed restructuring of heavy end UK assets and transition to greener steelmaking after due consideration of all the options over the last 7 months in consultation with union representatives,” Narendran says.

“In Netherlands, our production was lower due to the relining of BF6. The relining was completed in early February and we have stabilised the operations,” he adds.