Tata Steel Q2 Results Today: Earnings Likely To Jump Multiple; sales can increase by 60% year-on-year

NEW DELHI: It is likely to record a multiple increase in consolidated net profit for the September quarter with a 60% increase in sales over the same period. The EBITDA margin is seen to almost double on an annual basis.

According to analysts interviewed by ET NOW, Tata Steel could report a consolidated profit after tax (PAT) of Rs 11,823 crore for the quarter under review compared to Rs 1,546 crore in the same quarter last year.

Revenue for the quarter increased 59% year on year (YoY) to Rs 59,057 crore compared to Rs 37,163 crore posted a year ago.

Ebitda is seen at Rs 19,084 crore compared to Rs 6,227 crore on an annual basis. The EBITDA margin is seen to expand to 32% from 30% in the June quarter and to 16.76% in the quarter a year ago.

The margin jump is likely despite rising coking coal and commodity prices.

The profitability of European companies is growing sharply. Tata Steel can reduce debt by $ 1 billion per quarter, analysts say. Domestic steel prices were robust year-on-year in the September quarter as average prices for flat, long and semi-finished products increased by up to 40-70% year-on-year.

Tata Steel’s sales volumes in India fell 8% for the quarter year-on-year, but rose 12% sequentially, analysts said.

Elara Securities expects Tata Steel to post a profit of Rs 10,489 crore. It sees sales at Rs 59,720 crore, up 63.7 percent year-on-year.

Another brokerage firm, ICICIdirect, expects Tata Steel’s standalone operations to report an Ebitda per ton of Rs 36,500 compared to Rs 35,558 in the June quarter and Rs 12,861 in last year’s quarter. Standalone operations are expected to report a steel sales volume of 3.5 million tonnes (mt), while European operations steel sales are expected to reach 2.2 tonnes.

Tata Steel BSL, meanwhile, is expected to have a sales volume of 1.1 tonnes, according to the broker’s estimates.

“We expect European operations to report an Ebitda per ton of $ 200. For Q2FY22, on a consolidated basis, the top line is expected to rise 62% YoY to Rs 60,254 crore. Consolidated Ebitda is expected to rise 231% YoY to 20,212 crore. of rupees. Consolidated EBITDA margins are likely to reach 33.5 percent, “he said.


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