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Motilal Oswal Report
Tata Steel Ltd. reported a weak financial performance in Q3 FY23, missing our estimates. It was affected by lower realisations, higher input costs, higher interest expenses and depreciation, and higher freight and handling charges.
Tata Steel's standalone revenue was down 5% YoY/6% QoQ at Rs 305 billion, in line with our estimate of Rs 292 billion.
Standalone Ebitda was down 57% YoY and up 7% QoQ at Rs 52 billion (15% miss). Average selling price declined by Rs 8,837/tonne YoY. Ebitda/tonne was down 61% YoY at Rs 11,241/tonne, missing our estimate by Rs 2,643/tonne.
Adjusted profit after tax was down 66% YoY and up 1% QoQ at Rs 27 billion (26% miss), due to lower Ebitda and higher interest expenses and depreciation.
Tata Steel Europe missed our estimates significantly. Tata Steel Europe posted an operating loss of Rs 15.6 billion, as ASP declined by $219/tonne QoQ and $141/tonne YoY, along with a corresponding hike of $136/ tonne YoY in the overall costs.
Tata Steel's consolidated revenue was down 6% YoY/5% QoQ at Rs 571 billion, an 11% miss on our estimate of Rs 643 billion. Ebitda declined 75% YoY and 33% QoQ to Rs 40 billion, missing our estimate by 59%.
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