Tata Steel Q1 profit doubles to Rs 1,934 cr on strong Europe, India growth

Tata Steel’s first quarter consolidated profit more than doubled to Rs 1,933.8 crore compared to Rs 921.1 crore in the corresponding period last fiscal, driven by growth across the board.

Revenue during the quarter grew by 27.6 percent to Rs 37,832.8 crore from Rs 29,657.3 crore in year-ago, led by growth in all subsidiaries on strong steel demand.

“Tata Steel delivered strong performance across all geographies on the back of strong steel demand and buoyant spreads,” T V Narendran, CEO & Managing Director said.

“All verticals saw strong growth, with automotive and branded products segments now contributing to 19 percent and 33 percent of total volumes, respectively,” Narendran said.

Tata Steel’s EBITDA (earnings before interest, tax, depreciation and amortisation) increased 30 percent year-on-year to Rs 6,467.6 crore and margin expanded by 30 basis points to 17.1 percent in Q1.

Better realisations and improved operational efficiencies in India business, and higher selling price and better operational performance in Europe boosted consolidated EBITDA. India EBITDA per tonne stood at Rs 17,252.

Narendran said company expects underlying steel demand to be strong, particularly in India. “However, the rising trade tensions and the impact on the global economic momentum is a cause of concern.”

Tata Steel Europe’s revenue increased 17 percent year-on-year to Rs 16,429.31 crore with EBIT (earnings before interest and tax) rising 33 percent to Rs 1,666.21 crore for the quarter ended June 2018.

Tata Steel Europe (TSE) also saw stronger profitability with an improvement in spreads and operational performance, Narendran said.

TSE deliveries improved by 1.9 percent YoY to 2.45 million tonnes in Q1FY19, however, declined by 3.8 percent QoQ in seasonally weaker quarter.

Company’s standalone profit shot up 358 percent year-on-year to Rs 2,318 crore and revenue increased 26 percent to Rs 16,405.5 crore in Q1FY19. EBITDA surged 75 percent to Rs 5,118 crore and margin expanded 883 basis points to 31.2 percent compared to year-ago.

Tata Steel India’s total deliveries grew by 7.9 percent YoY to 2.97 million tonnes in Q1FY19; domestic deliveries grew by 13.7 percent YoY, much stronger than 9.2 percent YoY overall steel demand growth in India, the company said.

CNBC-TV18 poll estimates by analysts had expected consolidated profit at Rs 2,587.4 crore on revenue of Rs 35,856 crore and EBITDA at Rs 6,830 crore with margin at 19 percent for the quarter.

Source: MONEYCONTROL