Its revenue from operations fell 6% to Rs 59,490 crore in the first quarter, compared with Rs 63,430 crore in the same quarter of last year. Consolidated EBITDA for the quarter stood at Rs 6,122 crore, down 59% from a year ago.
The reported profit was down 63% quarter-on-quarter (QoQ), while revenue dropped 5% when compared with the preceding quarter.
The company said its profitability was affected by non-cash deferred tax charges on account of buy-in transactions at the British steel pension scheme.
Revenues from the India business rose by a marginal 3% to Rs 34,901 crore for the quarter under review. India’s EBITDA was at Rs 7,514 crore, a decline of 22%. This translates into EBITDA per ton of Rs 15,651 and a margin of 22%.
Post Q1 results, brokerage house CLSA maintained its ‘Outperform’ rating on Tata Steel for a target of Rs 125. The company reported results that were in line with estimates.
“We await clarity on — profitability outlook in India and Europe, Capex in Europe and the impact of blast furnace relining, guidance on debt, an explanation of one-off income/charges,” said the brokerage firm in a note.Meanwhile, Incred Equities has a Sell rating on Tata Steel with a target price of Rs 71, a downside potential of 40% from the current market prices.
“Result is on expected lines. QoQ other income was up Rs 1,000 crore which led to some respite on the bottom line otherwise the company would have made a consolidated loss,” it said.
“Rather than P&L, it’s deterioration in the balance sheet which worries us. Debt has again gone up Rs 40 billion QoQ. Indian business EBITDA declined QoQ (in line with our expectation) and Europe continues to bleed. With EAF’s coming online again in Europe BF profitability will be hit,” InCred Equities said.
At 11.58 am, the stock was trading 2.6% higher at Rs 118.5 on BSE. Meanwhile, in the last year, the stock has surged 23%.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
