On January 24, 2024, Tata Steel Limited (BSE, NSE: TATASTEEL) announced its Q3 2023-24 results, with India’s prominent steelmaker posting a Profit in Q3, but a decline in Revenue on a YoY basis.
Table of Content
Q3 FY24 Tata Steel Result Takeaways
Tata Steel reported results for the 9 months of the present fiscal year (FY24) and Q3 FY24. Here are the key highlights:
- The steel major reported Consolidated Revenues for the first nine months of the fiscal year at ₹1,70,483 Cr. EBITDA was clocked at ₹16,771 Cr, with an EBITDA margin of approximately 10%.
- For the Q3 FY24 (October-December 2024), the steel giant’s Consolidated Revenues were at ₹55,312 Cr, with EBITDA up by 47% QoQ to ₹6,334 Cr and the EBITDA margin standing at 11%.
- Tata Steel has spent ₹4,715 Cr on capital expenditure in Q3 FY24, and ₹13,357 Cr during 9MFY24. The commissioning, in phases, of the 5 MTPA expansion at Kalinganagar has begun.
- The Company’s Net Debt is registered at ₹77,405 Cr. The group liquidity stays robust at ₹23,349 Cr, comprising cash & cash equivalents to the tune of ₹10,825 Cr.
Additional Read: Q3 Results Dashboard
Tata Steel Market Highlights
In its Q3 FY24 result report, Tata Steel reported market-wise results:
- India Market
- For the India market, Revenues were registered at ₹35,011 Cr, quite stable based on QoQ.
- The Company’s production of crude steel was approximately 5.35 million tons, higher by 7% QoQ and on a YoY basis.
- Deliveries stood at 4.88 million tons, marginally higher on a QoQ basis, led by a rise in domestic deliveries (+3% QoQ and +10% YoY). A broad-based improvement was seen across main end-use segments.
- EBITDA was ₹8,302 Cr, translating into an EBITDA Margin of 24%.
- UK Market
- Revenues for the UK market stood at £603 million and the EBITDA loss was at £159 million. The production of liquid steel was 0.72 million tons while deliveries were clocked at 0.64 million tons. Deliveries were lower on a QoQ basis because of muted demand.
- In other news in the Tata Steel quarterly report, the Company, on 19th January 2024, “announced that it would begin statutory consultation on the proposed restructuring of the UK business as part of its transition to an economically and environmentally sustainable future”.
- Netherlands Market
- Netherlands Revenues were £1,239 million and EBITDA loss was at £117 million. The production of liquid steel was largely steady at 1.19 million tons but lower on a YoY basis because of the reline of one of the blast furnaces at Ijmuiden. Deliveries were at 1.30 million, up 5% on a QoQ basis.
The Management’s Take on Q3 Results
Leading Management of Tata Steel Limited had some key aspects of Q3 results to share and these are highlighted below:
- With a complex global environment for the industry, the economic downturn in China, and the general geopolitical scene, Tata Steel has managed “better margins aided by higher deliveries as well as realisations on a QoQ basis”.
- Domestic deliveries for Q3 FY24 were at 4.78 million tons, a rise of 3% QoQ and 10% YoY.
- The best-ever Q3 sales were achieved by the segments of Automotive plus well-formed brands like Tata Tiscon, Tata Astrum, and Tata Steelium.
- The consistent Indian market delivery growth has been supported by crude steel production at nearly 5 million tons across this financial year’s quarters.
- In Europe, deliveries in the Netherlands rose, while in the UK, they were low on a QoQ basis due to a lull in demand and operational issues due to the ageing assets.
- The Tata Steel Kalinganagar and Tata Steel Meramandali sites received ResponsibleSteelTM certification. The Company now has three certified Indian sites including Jamshedpur.
- Regarding strategic initiatives, the Company has largely met its goal of simplifying its Indian footprint, given the completion of the merger of the Tinplate Company of India and Tata Metaliks into Tata Steel.
Financial Results at a Glance
Here is a glimpse of the financial results, as given in the Tata Steel Press Release, of Q3 (figures in ₹ Cr as reported by the Company, except stated otherwise):
| Metrics | Q3 FY 2023-24 | Q2 FY 2023-24 | Q3 FY 2022-23 |
| Production (mn tons) | 7.58 | 7.31 | 7.56 |
| Deliveries (mn tons) | 7.15 | 7.07 | 7.15 |
| Revenue from Operations | 55,312 | 55,682 | 57,084 |
| EBITDA | 6,334 | 4,315 | 4,154 |
| Profit Before Tax (pre-exceptional) | 2,262 | 160 | 243 |
| Reported Profit After Tax (PAT) | 522 | (6,511) | (2,502) |
Additional Check: Tata Steel Share Price
Tata Steel: Q3 FY24 Result Summary
The operations of Tata Steel began in 1907. It was the first of its kind in Asia, established in India as a private steel company. The founders also constructed the first industrial city in India at Jamshedpur. Today, the Company is an international leader in the top global steel icons list. The Company boasts of an annual crude steel capacity spreading over operations in India at almost 20 MnTPA and the Company consistently records an optimal turnover time and again. The Company has captive mines and a regular raw material supply on account of which it has an edge over the competition and also a way to mitigate costs. The Company is the lowest-cost producer of steel in Asia. Tata Steel has a presence in Europe with two major steel production plants in the UK and the Netherlands. The Company is also well-positioned in South East Asia.
Q3 FY24 displayed a somewhat subdued performance for the steel icon, but Domestic markets proved to be resilient overall. Q3 was marked by a slow and steady rise in Indian sales to certain segments and verticals, especially to BPR (Branded Products and Retail). In the Automotive industry, the Company is poised to become the chosen supplier of steel in the future. With its relevant product mix and enhanced service offerings, Tata Steel can meet the demands of this industry with seamless operations. In Q3, Tata Steel has taken initiatives to scale up its Domestic production seeing this as its biggest market in the months and years to come.
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Source: https://www.tatasteel.com/media/20040/3qfy24-press-release.pdf
