Tata Steel reports 64% decline in Q4 net profit

29 May 2024 , 11:09 PM

Tata Steel has reported a 64% drop in its consolidated net profit for the quarter ending March 2024, with profits falling to ₹611 Crore from ₹1,705 Crore in the same quarter the previous year. The company also experienced a 7% year-on-year decline in revenue from operations, which totalled ₹58,687 Crore for the reporting quarter.

The company’s board has recommended a dividend of ₹3.6 per share, with June 21 set as the record date to determine the eligibility of shareholders. Subject to approval at the Annual General Meeting (AGM), the dividend will be disbursed on and from July 19.

The company’s board has approved a proposal to infuse up to $2.11 billion (₹17,407.50 Crore) into its wholly-owned foreign subsidiary, T Steel Holdings Pte Ltd, during FY25. This will be executed through the subscription to equity shares, potentially in multiple tranches.

Despite the challenging operating environment, Tata Steel’s CEO and MD, TV Narendran, highlighted the company’s progress in both domestic and international markets. Tata Steel recorded an EBITDA of ₹6,631 Crore for the January-March 2024 period, translating to an EBITDA margin of 11%. The company invested ₹4,850 Crore in capital expenditure during the quarter and a total of ₹18,207 Crore for the entire fiscal year. The phased commissioning of the 5 million tonnes per annum (MTPA) expansion at Kalinganagar is progressing well.

In India, Tata Steel’s deliveries rose by 5% year-on-year to 5.42 million tonnes. The domestic business generated revenues of ₹36,864 Crore, with an EBITDA of ₹8,261 Crore and an EBITDA margin of approximately 22%. Narendran noted the attractive structural market in India, emphasizing the company’s improved margins and expanded footprint in terms of volumes and product portfolio.

At the same time, Tata Steel’s operations in the UK and the Netherlands faced challenges. UK revenues were £647 million with an EBITDA loss of £34 million, while the Netherlands business recorded revenues of £1,324 million and an EBITDA loss of £27 million. The company is set to commence the closure of heavy-end assets in the UK in June and will proceed with plans to invest in a state-of-the-art Electric Arc Furnace at Port Talbot following extended discussions with UK trade unions.

On Wednesday, Tata Steel shares closed 0.51% lower at ₹174 on the NSE.