India Steel Market Watch
November 6: Tata Steel reported a consolidated net profit of Rs 1,528.71 crore for the quarter ended September, 2015 compared to Rs 1,254.33 crore in the same quarter last year, helped by sale of non-core stake in Tata Motors and Titan.
Tata Steel sales fell 18 percent to Rs 29,068.54 crore. Analysts, on an average, were expecting a loss of `95.9 crore on revenues of Rs 30,033 crore. Consolidated results include performance of Tata Steel's India, Europe and South East Asia businesses.
On a standalone basis Tata Steel’s profits rose about 2% to Rs 2,522.92 crore, helped by one-time gains.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) adjusted to one-off items halved to Rs 1,985 crore from the corresponding quarter last year on a consolidated basis. Steel deliveries fell 3% to 6.33 million tons.
Steel-makers in India and worldwide, including Tata Steel, have cut prices to remain competitive in the face of cheap imports from China and Russia. Global steel prices have fallen in tandem with falling iron ore prices internationally. Tata Steel's biggest competitor in India, JSW Steel, also just managed to avoid posting losses in the second quarter.
Tata Steel mothballed some plants and cut 2,000 jobs in Europe recently to combat widening losses in a market which haven't yet recovered from the downturn in the steel industry last decade. The company tried to sell its loss-making long products business to Klesch but the deal fell through with no signs of an uptick in demand in the region.
Jamshedpur-based Tata Steel clocked in a gain of Rs 2,808.29 crore due to sale of investments in Tata Motors and Titan. The company also got a one-time credit of Rs 9,683 crore due to reduction in expected pension outgo in the UK and Netherlands.
The company, however, took a non-cash impairment charge for strip business in the UK of Rs 8,669 crore on weakening market demand, coupled with high cost of doing business.
The new Kalinganagar project in Odisha with 3 million tons of steel production capacity is expected to be commissioned at the beginning of the next financial year. Net debt was about Rs 73,000 crore as on September 30, 2015.