Q3FY23 Preview: Tata Steel: Sales seen at Rs 56,856 crore, PAT at Rs 1,526 crore

Result date: 6^th February, 2023

Recommendation: Add

Target price: Rs 131

Source: IIFL Research

Tata Steel could post decline in revenue both over the year-ago quarter as well as sequentially. This weakness will be on the back of lower HRC prices in India as well as Europe. The company posted weak volume as well as realizations during the quarter.

EBITDA of domestic business could increase sequentially reflecting lower coking coal costs, though partly offset by elevated energy costs in Europe.

Profit After Tax (PAT) could decline 80% over the year-ago quarter.

Important management insights to watch out for:

• Guidance on Tata Steel Europe and NINL operations
• Timelines on commissioning of Kalinganagar expansion / plant
• Roadmap of transition to green steel in Europe and technology/financing
• Details on debt reduction and steel contracts, which will be re-priced in Europe and its impact on PAT

Source: Brokerage reports