Tata Steel Q1 FY23 Results – PAT down by 12.82%
Steel major, Tata Steel declared its Q1 results for the financial year 2022-23. Profit after tax was down by 12.82% to ₹7,765 crores. The company faced headwinds due to global supply chain issues affecting input raw material costs and steel prices. Let’s check out its key results.
In this article
Key Financial Highlights of Tata Steel Q1 FY23 Results
Hits
- 🙂 The revenue from operations stood at ₹63,430 crores in Q1 FY23, an 18.64% increase from Q1 FY22.
- 🙂 Revenue per ton rose by ₹8,534 quarter on quarter to ₹83,625 per ton due to better realizations but was down on an absolute basis due to lower volumes.
- 🙂 The EBITDA margin improved and EBITDA per ton increased by ₹3,780 to ₹22,717. Consolidated EBITDA for the quarter stood at ₹15,047 crores.
- 🙂 The company’s European operations achieved the highest ever quarterly EBITDA at £621 million, which translates to an EBITDA per ton of £290. The revenue from Europe’s operations was up by 33.54% YoY to ₹25,960.88 crores in Q1 FY23.
- 🙂 Net Debt to EBITDA ratio was 0.87x and the Net Debt to Equity ratio was 0.48x in Q1 FY22.
- 🙂 The revenue from operations stood at ₹63,430 crores in Q1 FY23, an 18.64% YoY increase from ₹53,465 crores in Q1 FY22.
ICYMI: Axis Bank Q1 FY23 results are out today!
Misses
- ☹ The PAT for the quarter for the steel major stood at ₹7,765 crore, declining 12.82% YoY (year on year) from ₹8,906.95 crore in Q1 FY22 due to the increased commodity and raw material costs. Other expenses also increased viz stock-in-trade, employee benefit expenses impacting the margins.
- 🙁 Raw Material costs increased primarily due to an increase in coking coal prices.
- 🙁 Deliveries were down 17% driven by lower volumes in India and Europe operations due to the imposition of the 15% export duty.
- 🙁 Tata Steel reported its earnings per share (EPS) for Q1 FY23 at ₹63.59, which declined by 14.35% YoY from ₹74.24 in Q1 FY22.
💬Management Speak
- The 6 MTPA Pellet plant at Kalinganagar will be commissioned in 3QFY23 followed by the Cold Roll Mill complex and the 5 MTPA expansion.
- Tata Steel Long Products, a subsidiary of Tata Steel, completed the acquisition of Neelachal Ispat Nigam Limited on 4th July 2022.
Steel demand
- Apparent steel consumption declined by ~4% QoQ.
- Exports volumes were down by ~40% due to the levy of export duty and moderation in overseas demand.
- Automotive continues to recover while Infrastructure / Construction and Capital goods segments witnessed moderation.
- China steel demand is likely to find support as COVID restrictions ease and pave way for pent-up demand
- India’s steel demand is expected to improve in 2HFY23 with the end of the monsoon, driven by an increase in government spending and auto revival
- EU Steel demand is affected by destocking, but the underlying demand across key steel end-use sectors is more stable.
Steel prices
- Global steel prices have moderated in the April – June period on the slowdown in global growth and regulation.
- Heightened volatility to persist as concerns over inflation and growth collide with supply chain & cost push constraints
- Restocking to drive steel prices, low inventory across steel end-use sectors
- Indian steel prices should pick up post monsoon on revival in construction activities and early onset of festive demand
- European steel prices are expected to be volatile on global cues
Raw material prices
- Coking coal prices to remain range-bound & volatile, thermal coal to provide support
- Seaborne iron ore prices to be impacted by demand dynamics esp. in China.
- European power and energy costs remain volatile due to uncertainty about Russia’s gas supply to Europe.
