• Wed. Jun 7th, 2023

Tata Steel shares gain ahead of fourth quarter results; What investors need to know

Last update: May 02, 2023, 12:02 p.m. HST

Shares of Tata Steel are in focus today as the steelmaker will announce its results for the quarter and full year ending March 2023. The metal stock rose to Rs 108.60 on the NSE, up from 0.7% from the previous close.

Analysts said the company’s net profit is expected to fall more than 91% year-on-year to Rs 955 crore due to weak performance in European business, according to brokerages. However, India’s trade performance is expected to be strong.

Earlier this month, Tata Steel said it recorded a 3% increase in consolidated steel production to 7.77 million tonnes (mt) in the March quarter. The company’s total steel production was 7.55 million tons in the prior year period. The steelmaker added that its Indian unit achieved crude steel production of 5.15 million tonnes for the quarter, up 3% sequentially.

On the other hand, Tata Steel Europe’s steel deliveries increased 7% sequentially to 2.13mt on improving demand environment, but its product mix was impacted due the modernization of CM21 (cold rolling mill).

ICICI Securities said it saw Tata Steel’s standalone operations reporting Ebitda per ton of Rs 13,250 per ton compared to Rs 11,350 per ton in Q3FY23. For Q4FY23, he expects European operations to register a loss at the level of EBITDA per ton. For Q4FY23E, European operations are expected to show negative Ebitda per ton of $110, he said.

“For Q4FY23E, on a consolidated basis, revenue is expected to decline by 14% YoY but increase by 5% QoQ to reach Rs 59,854 crore. Tata Steel Consolidated Ebitda for Q4FY23E is expected to increase by 32% QoQ to Rs 53.64 crore. Consolidated Ebitda margins for Q4FY23E are expected to be 9%, compared to 7.1% in Q3FY23. The ensuing consolidated PAT for Q4FY23E is expected to reach Rs 443 crore, down 95%,” ICICI Securities said.

Tata Steel shares have fallen 10% this year so far. This against a 6% drop in the BSE Metals index. Over the past five days, the stock has risen 2% against a 1.3% rise in the benchmark.

Nuvama expects Tata Steel’s profit to be Rs 192.20 crore from Rs 10,030 crore, down 98% year on year. It sees sales at Rs 59,299 crore, down 14.5% year-on-year.

“We expect Tata’s standalone Ebitda per ton to increase by 35% QoQ to Rs 13,998/ton due to improved realization and volume and a 10 per ton QoQ drop in coal price to coke. Tata Steel Europe could report negative EBITDA per ton of $107 per ton vs minus $95 per ton in Q3FY23 due to lower realization, partly offset by lower CoP,” Nuvama said.

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