On 1 November 2023: Tata Steel Limited (BSE, NSE: TATASTEEL) announced its Q2 2023-24 financial results, reporting stable increases in India sales to specific segments. In India, the steel giant reported domestic deliveries up 6% for the quarter, aligned with an improvement in demand.
Additional Read: Q2 Results Dashboard
Table of Content
Consolidated Result Highlights
Here are the overall consolidated highlights in Q2 results:
- Consolidated Revenues for Q2 FY 23-24 amounted to ₹55,682 Cr, with EBITDA at ₹4,315 Cr and EBITDA Margin at 8%.
- During Q2 FY 23-24, the company spent ₹4,553 Cr on capital expenditure as the 0.75 MTPA EAF project in Punjab and the 5 MTPA project in Kalinganagar are being implemented.
- The Net Debt is at ₹77,032 Cr, but Group liquidity remains robust at ₹27,637 Cr. The company has now been accorded the rating of “Investment Grade” by Standard & Poor’s and Moody’s.
Additional Read: Tata Steel Share Price
Key Highlights – India Market
In terms of the Indian business, the company reported the following:
- Indian revenues stood at ₹33,922 Cr and EBITDA stood at ₹6,841 Cr.
- In India, the production of crude steel was approximately 5 Mn tons and was similar on a QoQ basis, but it had risen 5% on a YoY basis.
- Deliveries stood at 4.82 Mn, marginally higher on a QoQ basis and boosted by an increase in domestic deliveries. Improvement on a broad basis was witnessed across main end-use segments despite seasonal variables.
- EBITDA stood at ₹6,841 Cr with an EBITDA Margin of 20%.
International Business Highlights
Concerning the international stage, Q2 results indicated the following:
- Europe Revenues were at £1,812 Mn with an EBITDA loss of £242 Mn.
- Liquid steel production was at 1.95 Mn tons and the QoQ improvement was mainly due to enhanced operational efficiency in the Netherlands units.
- Deliveries were at 1.81 Mn tons and appear marginally lower due to muted demand and the continued reline of a blast furnace at Ijmuiden, which will see completion in Q3 FY 23-24.
- Tata Steel has announced its investment in a world-class scrap-based EAF at Port Talbot in the UK.
Tata Steel Management Commentary
The MD and CEO of Tata Steel Limited, T V Narendran, had some insights on the results and these are shared below:
- Tata Steel has delivered a stable performance with crude steel production of approximately 5 Mn tons.
- Domestic deliveries were up 6% YoY, even in the light of seasonal factors in Q2.
- In terms of the main segments, Retail and Auto & Branded Products have had the best-ever Q2 sales.
- The production of FHCR coils has begun at the Kalinganagar CRM plant and the company has started to receive approvals from OEMs in the automotive sector for cold-rolled steel.
- Retail sales to home builders show constant growth due to the company’s robust network of distribution.
- The company’s e-commerce platform, Aashiyana, services over 10,000 customers per month.
- On the sustainability front, the company remains committed to Net Zero by 2045, taking decarbonisation measures aligned with Tata Steel’s operational locations in mind.
- The CEO and MD was pleased to share that the company has been awarded the Recognition of Safety and Health (2023) by Worldsteel.
Tata Steel’s CFO and Executive Director, Koushik Chatterjee had some reflections to add:
- Tata Steel’s Consolidated Revenues for Q2 were at ₹55,682 Cr, with Consolidated EBITDA at ₹4,315 Cr and EBITDA Margin of 8%.
- The Indian business generated a higher margin of approximately 20%, and EBITDA was at ₹6,841 Cr. Europe saw a moderation in margins, especially in the UK. On a QoQ basis, the business in the Netherlands was quite stable.
- The Group’s liquidity is on a strong footing.
- The company continues to prioritise the completion of the expansion of the 5 MTPA at Kalinganagar.
- Given the company’s results, the business will continue to focus on operational improvement, cost optimisation, and working capital management to make cashflows maximal.
Additional Read: Tata Group Overview
Tata Steel Financial Results
Here are the financial results of Q2 in a nutshell (all figures in ₹ Cr, except where indicated by %):
| Metrics | Q2 FY 2023-24 | Q2 FY 2022-23 |
| Total Revenue from Operations | 55,682 | 59,878 |
| Adj. EBITDA | 4,147 | 5,817 |
| Pre exceptional PBT | 160 | 2,625 |
| Reported PAT | (6,511) | 1,297 |
Note: EBITDA Margin was at 7% for Q2 FY 23-24
Key Drivers for QoQ Change:
- Revenues went down 6% due to lower volumes and low realisations spread over geographies.
- The cost of raw materials went down on lower raw material cost in India, and this was offset, in part, by an increase in Europe.
- There was a decline in inventory value in European operations.
- There was an impairment in heavy-end assets and restructuring costs concerning UK operations.
About Tata Steel Limited
Tata Steel commenced its operations as far back as 1907. It was incorporated in India as a private and integrated steel company, the first of its kind in Asia. Besides the company, the founders also built the first industrial city at Jamshedpur. In the present day, Tata Steel is a global leader among steel giants. The annual crude steel capacity across operations in India is almost 20 MnTPA and the company continues to record a high turnover year after year. The company has an innovative way to mitigate costs and have an edge over the competition with the possession and operation of captive mines and a consistent supply of raw materials. The company has the distinction of being the lowest-cost producer of steel in Asia.
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The company’s Indian product portfolio falls under five segments – Industrial Products, Automotive and Special Products, Branded Products and Retail, Projects and Exports, and Services and Solutions. Tata Steel supplies cold-rolled, hot-rolled, branded offerings, galvanised offerings, and more. Significantly, the company has a presence in Europe with a capacity of 12.4Mn TPA of crude steel production. This came in 2007 after the company acquired Corus. The main facilities of production are located in the Netherlands and the UK, where high-grade strip steel is made to meet the demands of the automotive, packaging, engineering, and construction industries. Tata Steel also has a prominent presence in Southeast Asia, the production capacity of which is 2.2 Mn TPA, with a flagship plant in Singapore. Apart from this, the company forges ahead with a pan-Thailand network of distribution with exports to Indonesia, Laos, Malaysia, Cambodia, etc.
Source: https://www.tatasteel.com/investors/financial-performance/financial-results/
