Tata Steel Ltd's Q3FY19 consolidated adjusted net profit falls 17.6% yoy to Rs1,714cr : Misses Estimates

The company’s consolidated revenue stood at Rs41,220cr, up 24.5% yoy but down 5.3% qoq.

Feb 08, 2019 02:02 IST India Infoline Research Team

Tata Steel Ltd Q3FY19

Consolidated Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Revenue 41,220 24.5
EBITDA 6,734 16.4
EBITDA Margin (%) 16.3 [115]
Net Profit (adjusted) 1,714 [17.6]
***EBITDA margin change is bps

Tata Steel Ltd's results for Q3FY19 missed expectations due to sharp fall in sales volumes and higher raw material costs. Revenue grew by 24.5% yoy to Rs41,220cr (expectation Rs41,382cr). EBITDA stood at Rs6,734cr, up 16.4% yoy against estimates of Rs7,300cr. EBIDTA margin fell by 115bps yoy to 16.3%. Adjusted Net Profit stood at Rs1,714cr against an estimate of Rs2,482cr.
  • Steel production for the quarter stood at:
    • Tata Steel India   3.3mn tonnes (up 1.8% yoy)
    • Tata Steel Europe   2.33mn tonnes  (down 10% yoy)
    • South East Asia   0.51mn tonnes (down 7.3% yoy)
    • Bhushan Steel   1.04mn tonnes (down 7.3% yoy)
  • Steel sales for the quarter stood at:
    • Tata Steel India   2.97mn tonnes (down 10% yoy)
    • Tata Steel Europe   2.3mn tonnes  (down 5.7% yoy)
    • South East Asia   0.58mn tonnes (down 6.5% yoy)
    • Bhushan Steel   0.92mn tonnes (down 8% yoy)
  • Segmental Revenue for the quarter stood at:
    • Tata Steel India   Rs17,174cr (up 10.1% yoy)
    • Tata Steel Europe   Rs15,850cr (up 7.9% yoy)
    • South East Asia   Rs2,572cr (up 3.2% yoy)
    • Bhushan Steel   Rs4,889cr (down 16.6% qoq)
  • Segmental EBITDA for the quarter stood at:
    • Tata Steel India   Rs4,560cr (down 1.9% yoy)
    • Tata Steel Europe   Rs947cr  (up 55.8% yoy)
    • South East Asia    Rs10cr  (down 95% yoy)
    • Bhushan Steel   Rs1,008cr (down 14.4% qoq)
  • Segmental EBITDA per tonne for the quarter stood at:
    • Tata Steel India   Rs15,354 (up 9% yoy)
    • Tata Steel Europe   Rs4,117  (up 65.2% yoy)
    • South East Asia    Rs172  (down 95% yoy)
    • Bhushan Steel   Rs10,957 (up 6.1% qoq)
  • Net debt at the end of Q3FY19 stood at Rs1.01 lakh cr with cash and current investments at Rs8,549cr.
  • The company expects to close the sale of 70% of Tata Steel’s stake in its SEA operations for $327mn. The consolidated gross debt is expected to come down by ~$0.5bn as well after the sale.
  • The European operations are expected to revive after the Port Talbot facility was restarted in January 2019.
  • Regarding the merger with ThyssenKrupp, the management stated that they expect an update from the European Commission soon.

Technical View:

Tata Steel Ltd ended at Rs. 469.55, down by 18.05 points or 3.7% from its previous closing of Rs. 487.60 on the BSE.
The scrip opened at Rs. 482.25 and touched a high and low of Rs. 487 and Rs. 466.80 respectively. A total of 89,42,468 (NSE+BSE) shares were traded on the counter. The stock traded above its 200 DMA.

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