Tata Steel Reports Q3 Profit Surge Driven by Strong Indian Demand, Falls Short of Estimates

Tata Steel Ltd has rebounded in the third quarter, reporting a consolidated net profit of Rs 522.14 crore, a significant turnaround from the net loss of Rs 2,501.95 crore in the same quarter last year. Robust domestic demand played a pivotal role in offsetting European weaknesses. The second quarter had seen a net loss of Rs 6,511.16 crore, primarily attributed to impairment charges.

The steel industry reaped the benefits of escalating steel prices fueled by substantial infrastructure spending. However, the surge in coking coal costs counteracted some of these gains.

While analysts expected Tata Steel to report a consolidated net profit of Rs 702.70 crore and revenue of Rs 56,400.50 crore, the actual figures fell short of these estimates. Consolidated revenue from operations during October-December declined three percent to Rs 55,311.9 crore compared to the year-ago period. On a sequential basis, it dipped 0.7 percent from the previous quarter.

Tata Steel’s India segment experienced a two percent growth in quarterly revenue, reaching Rs 34,681.90 crore. The company achieved a ‘best-ever 3Q’ in sales, with domestic deliveries totaling 4.88 million tonnes, driven by continued strength in Indian steel demand. Crisil’s predictions align with this positive trend, forecasting double-digit growth of 11-13 percent for the Indian steel sector in the current fiscal year.

In contrast, Tata Steel faced challenges in Europe, with revenue from European operations declining by 12.5 percent to Rs 18,141.97 crore in the quarter. The company recently announced plans to shut down two blast furnaces at its Port Talbot Steelworks in the UK, potentially affecting up to 2,800 jobs. This decision aligns with Tata Steel’s efforts to transform and restructure its UK business in line with environmentally friendly goals.

Liquid steel production for Tata Steel Netherlands and the UK recorded mixed results, with production and deliveries varying on a quarterly and yearly basis. The European market’s subdued demand dynamics posed challenges for Tata Steel’s performance in the region.

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