Steel major Tata Steel Ltd. expects investments made to expand capacity in India to translate into higher volumes in the coming quarters, although elevated coking coal prices and higher input costs are likely to keep margins under pressure, Chief Executive Officer and Managing Director T. V. Narendran told NDTV Profit.
"Investments made in volumes are benefitting us," Narendran said, adding that the company aims to achieve better volumes in India. At the same time, he cautioned that margins will be under pressure on higher coal prices, with coking coal prices expected to remain elevated.
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Narendran said the Middle East conflict has increased input costs but has not disrupted supplies.
"The Middle East war has impacted costs, not supplies," he said, adding that the company incurred a cost escalation of around Rs 800 crore in its India business during the June quarter.
To mitigate risks, Tata Steel is looking to diversify sources for pyroxenite imports.
He also expressed optimism about growth in the Netherlands market and said the company would continue to focus on consolidating its businesses, streamlining value chains and expanding Neelachal Ispat.
Narendran added that Tata Steel expects to maintain a balance between its downstream and upstream businesses while keeping its debt-to-equity ratio in the 4.3-4.5 range.
June Quarter Earnings
Tata Steel reported a 21% sequential decline in consolidated net profit to Rs 2,318 crore for the June quarter, as a one-time loss of Rs 345 crore weighed on earnings.
Revenue from operations declined 3.9% quarter-on-quarter to Rs 60,794 crore, while EBITDA fell 5.7% to Rs 9,264 crore.
Despite the sequential decline, both revenue and operating profit came in ahead of analysts' estimates.
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