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Tata Steel

4 May 2022 , 05:39 PM

Tata Steel consolidated net sales increased 38.57% to Rs 69323.5 crore in Q4FY22 compared to Q4FY21. Sales of Tata Steel India segment has gone up 34.09% to Rs 36,680.93 crore (accounting for 40.46% of total sales). Sales of Tata Steel Long Products segment has gone up 16.34% to Rs 1,799.40 crore (accounting for 1.98% of total sales). Sales of Other Indian Operations segment has gone up 57.47% to Rs 6,192.41 crore (accounting for 6.83% of total sales). Sales of Tata Steel Europe segment has gone up 52.91% to Rs 26,388.73 crore (accounting for 29.11% of total sales). Sales of Other Trade Related Operations segment has gone up 79.55% to Rs 17,188.51 crore (accounting for 18.96% of total sales). Sales of segment has gone down 20.72% to Rs 2,419.93 crore (accounting for 2.67% of total sales). Inter-segment sales rose Rs 12,799.22 crore to Rs 21,326.53 crore.

Operating profit margin has declined from 28.35% to 21.68%, leading to 5.96% rise in operating profit to Rs 15,029.61 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 25.02% to 32.18%. Purchase of finished goods cost fell from 7.23% to 5.19%. Employee cost decreased from 10.43% to 9.10%. Other expenses rose from 29.86% to 30.96%.

Other income rose 7.36% to Rs 292.2 crore. PBIDT rose 5.99% to Rs 15321.81 crore. Provision for interest fell 41.14% to Rs 1098.51 crore.

PBDT rose 12.97% to Rs 14223.3 crore. Profit before interest, tax and other unallocable items (PBIT) has slumped 2.66% to Rs 14,722.13 crore. PBIT of Tata Steel India segment rose 5.47% to Rs 12,362.59 crore (accounting for 83.97% of total PBIT). PBIT of Tata Steel Long Products segment fell 65.11% to Rs 176.57 crore (accounting for 1.20% of total PBIT). PBIT of Other Indian Operations reported loss of Rs 969.64 crore compared to profit of Rs 457.63 crore. PBIT of Tata Steel Europe segment rose 264.27% to Rs 4,348.77 crore (accounting for 29.54% of total PBIT). PBIT of Other Trade Related Operations reported loss of Rs 1,263.62 crore compared to profit of Rs 1,128.49 crore. PBIT of segment rose 31.66% to Rs -122.20 crore (accounting for -0.83% of total PBIT). PBIT of segment fell 35.75% to Rs 189.66 crore (accounting for 1.29% of total PBIT).

PBIT margin of Tata Steel India segment fell from 42.85% to 33.70%. PBIT margin of Tata Steel Long Products segment fell from 32.72% to 9.81%. PBIT margin of Other Indian Operations segment fell from 11.64% to 15.66%. PBIT margin of Tata Steel Europe segment rose from 6.92% to 16.48%. PBIT margin of Other Trade Related Operations segment fell from 11.79% to 7.35%. PBIT margin of segment rose from negative 163.15% to 614.69%. PBIT margin of segment fell from 9.67% to 7.84%. Overall PBIT margin fell from 24.07% to 16.24%.

Profit before tax grew 17.48% to Rs 11,979.91 crore. Share of profit/loss was 5.94% higher at Rs 159.35 crore. PBT before EO was up 17% to Rs 12139.26 crore. The company reported net EO expense of Rs 274.29 crore compared to net EO expense of Rs 991.13 crore. PBT after EO was up 27% to Rs 11864.97 crore. Provision for tax was expense of Rs 2029.85 crore, compared to Rs 2194.95 crore. Effective tax rate was 17.11% compared to 23.46%.

Minority interest decreased 84.76% to Rs 78.92 crore. Net profit attributable to owners of the company increased 46.84% to Rs 9,756.20 crore.

Equity capital increased from Rs 1,197.61 crore as of 31 March 2021 to Rs 1,221.21 crore as of 31 March 2022. Per share face Value remained same at Rs 10.00.

Promoters stake was 33.92% as of 31 March 2022 compared to 34.41% as of 31 March 2021 . Promoters pledged stake was 1.55% as of 31 March 2022 compared to 1.55% as of 31 March 2021 .

Full year results analysis

Net sales of Tata Steel has increased 55.91% to Rs 243959.17 crore. Sales of Tata Steel India segment has gone up 53.35% to Rs 1,29,021.35 crore (accounting for 40.39% of total sales). Sales of Tata Steel Long Products segment has gone up 43.20% to Rs 6,801.63 crore (accounting for 2.13% of total sales). Sales of Other Indian Operations segment has gone up 99.94% to Rs 21,274.90 crore (accounting for 6.66% of total sales). Sales of Tata Steel Europe segment has gone up 60.61% to Rs 90,022.96 crore (accounting for 28.18% of total sales). Sales of Other Trade Related Operations segment has gone up 104.89% to Rs 60,123.91 crore (accounting for 18.82% of total sales). Sales of Rest of the World segment has gone down 7.82% to Rs 739.38 crore (accounting for 0.23% of total sales). Sales of segment has gone up 23.31% to Rs 11,481.81 crore (accounting for 3.59% of total sales). Inter-segment sales rose Rs 38,554.20 crore to Rs 75,506.77 crore.

Profit before interest, tax and other unallocable items (PBIT) has jumped 106.42% to Rs 66,366.93 crore. PBIT of Tata Steel India segment rose 88.21% to Rs 51,456.30 crore (accounting for 77.53% of total PBIT). PBIT of Tata Steel Long Products segment rose 11.61% to Rs 1,288.31 crore (accounting for 1.94% of total PBIT). PBIT of Other Indian Operations segment fell 52.46% to Rs 546.79 crore (accounting for 0.82% of total PBIT). PBIT of Tata Steel Europe reported profit of Rs 12,163.85 crore compared to loss of Rs 618.39 crore. PBIT of Other Trade Related Operations segment fell 98.72% to Rs 39.40 crore (accounting for 0.06% of total PBIT). PBIT of Rest of the World segment rose 23.33% to Rs -382.98 crore (accounting for -0.58% of total PBIT). PBIT of segment rose 128.70% to Rs 1,255.26 crore (accounting for 1.89% of total PBIT).

PBIT margin of Tata Steel India segment rose from 32.50% to 39.88%. PBIT margin of Tata Steel Long Products segment fell from 24.30% to 18.94%. PBIT margin of Other Indian Operations segment fell from 10.81% to 2.57%. PBIT margin of Tata Steel Europe segment rose from negative 1.10% to 13.51%. PBIT margin of Other Trade Related Operations segment fell from 10.49% to 0.07%. PBIT margin of Rest of the World segment rose from negative 62.28% to negative 51.80%. PBIT margin of segment rose from 5.89% to 10.93%. Overall PBIT margin rose from 16.49% to 20.77%.

Operating profit margin has jumped from 19.49% to 26.02%, leading to 108.13% rise in operating profit to Rs 63,489.95 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 29.23% to 30.12%. Purchase of finished goods cost fell from 6.33% to 6.09%. Employee cost decreased from 12.85% to 9.25%. Other expenses fell from 31.91% to 29.31%.

Other income fell 12.36% to Rs 784.89 crore. PBIDT rose 104.70% to Rs 64274.84 crore. Provision for interest fell 28.19% to Rs 5462.2 crore. Loan funds declined from Rs 88,501.41 crore as of 31 March 2021 to Rs 75,561.35 crore as of 31 March 2022. Inventories rose to Rs 48,824.39 crore as of 31 March 2022 from Rs 33,276.38 crore as of 31 March 2021. Sundry debtors were higher at Rs 12,246.43 crore as of 31 March 2022 compared to Rs 9,539.84 crore as of 31 March 2021. Cash and bank balance rose to Rs 15,898.93 crore as of 31 March 2022 from Rs 5,782.18 crore as of 31 March 2021. Investments rose to Rs 13,139.85 crore as of 31 March 2022 from Rs 10,681.93 crore as of 31 March 2021 .

PBDT rose 147.18% to Rs 58812.64 crore. Provision for depreciation fell 1.44% to Rs 9100.87 crore. Profit before tax grew 241.44% to Rs 49,711.77 crore. Share of profit/loss was 98.31% higher at Rs 649.16 crore. PBT before EO was up 238% to Rs 50360.93 crore. The company reported net EO expense of Rs 134.06 crore compared to net EO expense of Rs 1043.16 crore. PBT after EO was up 263% to Rs 50226.87 crore. Provision for tax was expense of Rs 8477.55 crore, compared to Rs 5653.9 crore. Effective tax rate was 16.88% compared to 40.84%.

Minority interest increased 128.05% to Rs 1,595.39 crore. Net profit attributable to owners of the company increased 436.08% to Rs 40,153.93 crore.

Equity capital increased from Rs 1,197.61 crore as of 31 March 2021 to Rs 1,221.21 crore as of 31 March 2022. Per share face Value remained same at Rs 10.00.

Promoters stake was 33.92% as of 31 March 2022 ,compared to 34.41% as of 31 March 2021 . Promoters pledged stake was 1.55% as of 31 March 2022 ,compared to 1.55% as of 31 March 2021 .

Cash flow from operating activities increased to Rs 44,380.99 crore for year ended March 2022 from Rs 44,326.68 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 10,522.20 crore, compared to Rs 6,978.59 crore during the year ended March 2021.

Management Comments:

Mr. T V Narendran, Chief Executive Officer & Managing Director:

?Tata Steel has again demonstrated its ability to deliver stellar results despite heightened complexity in the face of COVID as well as geopolitical tensions. Our Indian business showed broad based growth across our chosen segments due to our sustained focus on customer relationships, our distribution network and our portfolio of brands supported by our agile business model. Our European operations delivered robust performance as the transformation programme undertaken helped to leverage the strong business environment. We have pursued several initiatives to de-risk the business particularly across procurement and supply chain and continue to invest in technology and digitisation to drive productivity and improve our resilience. Kalinganagar expansion is progressing well and will drive cost savings as well as product mix enrichment. The acquisition of Neelachal Ispat Nigam Limited will be closed in Q1FY23 and we will scale it up rapidly to drive expansion of our high value retail business. I am happy to share that Tata Steel has been recognized as Steel sustainability champion for the fifth year in a row by the WorldSteel.?

Mr. Koushik Chatterjee, Executive Director and Chief Financial Officer:

?We have closed the financial year with consistent and record operating and financial performance for the year, surpassing the previous best in FY21, with EBIDTA being 2x and Profit after Tax being >5x the previous year. This is despite the significant surge in international coal prices and inflationary impact of various commodities. Our full year consolidated revenues stood at Rs 2,43,959 crore and EBIDTA was Rs 63,830 crore which works out to a margin of 26% and EBITDA per ton of Rs 21,626. Our cash outflow for the capex in the year was Rs 10,522 crore, which is well within our earlier guidance. We continue to focus on deleveraging while advancing on our strategic growth priorities – our focus is on completion of the Kalinganagar expansion. Tata Steel has generated strong free cash flows of Rs 27,185 crore for the year despite higher working capital, taxes, and capex. While the Indian business continued to perform strongly with EBITDA margin of 39% and an EBITDA per ton of Rs 28,863, our European business generated the highest ever EBITDA of ?1,199 million (Rs 12,164 crore) which translates to an EBITDA per ton of ?133. We have repaid Rs 15,232 crore during the year. As a result of the strong financial performance, our Net Debt to EBIDTA has further improved to 0.8x and our financial metrics continue to be well within investment grade level. As part of the overall policy to reward the shareholders the Board has recommended a record dividend of Rs 51 per share and have also recommended the splitting of the shares to Rs 1 per share face value in a 10:1 split?.

The scrip is currently trading at Rs 1261

Tata Steel : Consolidated Results
Particulars	2203 (03)	2103 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	69,323.50	50,028.37	39	243959.2	156477.4	56
OPM (%)	21.7	28.4		26.0	19.5
OP	15,029.61	14,184.08	6	63,489.95	30,504.26	108
Other Inc.	292.2	272.18	7	784.89	895.6	-12
PBIDT	15,321.81	14,456.26	6	64,274.84	31,399.86	105
Interest	1,098.51	1,866.27	-41	5,462.20	7,606.71	-28
PBDT	14,223.30	12,589.99	13	58,812.64	23,793.15	147
Depreciation	2243.39	2392.41	-6	9100.87	9233.64	-1
PBT	11,979.91	10,197.58	17	49711.77	14559.51	241
Share of Profit/(Loss) from Associates	159.35	150.41	6	649.16	327.34	98
PBT before EO	12139.26	10347.99	17	50360.93	14886.85	238
EO Income	-274.29	-991.13	72	-134.06	-1043.16	87
PBT after EO	11864.97	9356.86	27	50226.87	13843.69	263
Taxation	2029.85	2194.95	-8	8477.55	5653.9	50
PAT	9835.12	7161.91	37	41749.32	8189.79	410
Minority Interest (MI)	78.92	517.76	-85	1595.39	699.57	128
Net profit	9756.2	6644.15	47	40153.93	7490.22	436
EPS (Rs)*	#	#		329.7	65.9
Notes
* EPS is on current equity of Rs 1,221.30 crore, Face value of Rs 10, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

Tata Steel : Consolidated Segment Results
	% of (Total)	2203 (03)	2103 (03)	Var.(%)	% of (Total)	2203 (12)	2103 (12)	Var.(%)
Sales
Tata Steel India	40	36,680.93	27,355.43	34	40	129021.4	84,132.92	53
Tata Steel Long Products	2	1,799.40	1,546.74	16	2	6,801.63	4,749.87	43
Other Indian Operations	7	6,192.41	3,932.37	57	7	21,274.90	10,640.56	100
Tata Steel Europe	29	26,388.73	17,257.95	53	28	90,022.96	56,050.93	61
Other Trade Related Operations	19	17,188.51	9,572.95	80	19	60,123.91	29,344.16	105
Rest of the world	0	-19.88	109.6	PL	0	739.38	802.09	-8
South East Asian operations	3	2,419.93	3,052.55	-21	4	11,481.81	9,311.07	23
Total Reported Sales	100	90,650.03	62,827.59	44	100	3,19,465.94	1,95,031.60	64
Less: Inter segment revenues		21,326.53	12,799.22	67		75,506.77	38,554.20	96
Net Sales		69,323.50	50,028.37	39		2,43,959.17	1,56,477.40	56
PBIT
Tata Steel India	84	12,362.59	11,721.84	5	78	51,456.30	27,339.69	88
Tata Steel Long Products	1	176.57	506.11	-65	2	1,288.31	1,154.25	12
Other Indian Operations	-7	-969.64	457.63	PL	1	546.79	1,150.20	-52
Tata Steel Europe	30	4,348.77	1,193.83	264	18	12,163.85	-618.39	LP
Other Trade Related Operations	-9	-1,263.62	1,128.49	PL	0	39.4	3,076.93	-99
Rest of the world	-1	-122.2	-178.81	32	-1	-382.98	-499.51	23
South East Asian operations	1	189.66	295.17	-36	2	1,255.26	548.87	129
Total PBIT	100	14,722.13	15,124.26	-3	100	66,366.93	32,152.04	106
Less : Interest		1,098.51	1,866.27	-41		5,462.20	7,606.71	-28
Add: Other un-allcoable		-1,758.65	-3,901.13	55		-10,677.86	-10,701.64	0
PBT		11,864.97	9,356.86	27		50,226.87	13,843.69	263