EconomyResults
Tata Steel Q2 profit rises 18% to ₹3,666 crore as India business carries the group
The results, delayed by 11 days, show India operations earning ₹5,055 crore while the UK unit stays loss-making. Noel Tata retires as vice-chairman on November 11.
Key points
- Consolidated net profit rose 18.2% to ₹3,666.41 crore in the September quarter, on revenue of ₹65,436 crore.
- India operations made a profit after tax of ₹5,055 crore, up 19.9%, with an EBITDA margin of 25%.
- Noel Tata retires as vice-chairman and director at the close of business on November 11.
Tata Steel’s consolidated net profit rose 18.2% to ₹3,666.41 crore in the July-September quarter, against ₹3,101.75 crore a year earlier, as strong India volumes offset losses in the United Kingdom. Revenue was ₹65,436.24 crore, up 11.5% on the year and 7.6% on the previous quarter.
The board approved the numbers on Saturday, after postponing the meeting from October 27. Profit was 58.1% higher than in the April-June quarter. Consolidated EBITDA was ₹10,665 crore, up 14% on the quarter, and EBITDA per tonne stayed above ₹13,000. Deliveries rose 9% on the quarter to 7.92 million tonnes.
India does the heavy lifting
India operations brought in revenue of ₹42,653 crore, up 22.6% on the year, and a profit after tax of ₹5,055 crore, up 19.9%. EBITDA was ₹17,790 per tonne, a 25% margin, and volumes rose 16% on the quarter.
Chief executive T V Narendran said “India continued to be the cornerstone of our performance”. Chief financial officer Koushik Chatterjee said higher India volumes and the normalisation of the Netherlands business offset elevated input costs.
Europe still a drag
The Netherlands unit had revenue of ₹15,330 crore, against ₹15,719 crore a year ago. Its EBITDA was ₹790 crore, below the ₹916 crore of a year earlier but up sharply from ₹39 crore in the first quarter, helped by better pricing and the restart of a direct sheet plant in early August.
The UK unit remained in the red. Revenue fell to ₹5,275 crore from ₹5,927 crore, and the EBITDA loss was ₹719 crore, slightly narrower than the ₹765 crore loss a year earlier but wider than the ₹341 crore loss in the first quarter. Deliveries fell 22% on the quarter, which the company attributed to weak demand and stock build-up ahead of revised trade measures that took effect on July 1.
Debt, capex and the audit note
Tata Steel spent about ₹3,280 crore on capital projects in the quarter and ₹6,860 crore in the half-year. Net debt was ₹91,423 crore, or 2.4 times EBITDA.
On a standalone basis, profit was ₹5,053.64 crore on revenue of ₹43,103.55 crore. The auditors gave a qualified opinion on the standalone accounts, citing uncertainties at Tata Steel Nederland, whose carrying value in the books is ₹59,078.13 crore. For the consolidated accounts the reviewers flagged the same unit’s impairment indicators.
Noel Tata steps down
The company also said Noel Naval Tata will retire as non-executive director and vice-chairman at the close of business on November 11, under the Tata Group governance guidelines. He has been associated with the company since March 2022.