Tata Steel Q4 Results: Operating Profit Falls 8.6%, But Beat Estimates

Tata Steel Ltd. reported a decline in net profit for the fourth quarter of fiscal 2024, missing analysts' estimates.

The steel supplier and manufacturer's net profit fell 64.6% year-on-year to Rs 555 crore in the January-March quarter, according to an exchange filing issued on Wednesday. This compares with the Rs 892-crore consensus estimate of analysts polled by Bloomberg.

Revenue of the steel conglomerate firm dropped 6.8% year-on-year to Rs 58,687 crore during the period.

The board has recommended a dividend of Rs 3.60 per share.

Tata Steel Q4 FY24 Highlights (Consolidated, YoY)

• Revenue fell 6.8% to Rs 58,687 crore (Bloomberg Estimate: Rs 58,375 crore).

• Ebitda declined 8.6% to Rs 6,601 crore (Bloomberg Estimate: Rs 6,040 crore).

• Margins contracted to 11.2% versus 11.5% (Bloomberg Estimate: 10.3%).

• Net profit fell 64.6% to Rs 555 crore (Bloomberg Estimate: Rs 892 crore).

The company incurred exceptional losses worth Rs 598 crore due to the surrender of Sukinda Chromite Block in Odisha and the restructuring of its European operations.

Issue Of Non-Convertible Debentures

Tata Steel has approved the issue of additional debt securities, in one or more tranches, of Rs 2,700 crore in the form of NCDs on a private placement basis.

Tata Steel To Invest In Overseas Unit

T Steel Holdings Pvt. is a wholly owned subsidiary of Tata Steel, incorporated in Singapore. Tata Steel routes its investment into overseas businesses through TSHP.

Tata Steel proposed to infuse funds up to $2.11 billion (~Rs 17,408 crore) in TSHP in the form of equity subscription. The proposed fund infusion will be used by TSHP to repay the existing external debt at offshore entities and to support the restructuring costs at Tata Steel UK Ltd.

Further, existing debt instruments aggregating up to $565 million (~Rs 4,661.25 crore), held by Tata Steel in TSHP will also be converted into equity shares of TSHP to be held by Tata Steel.

Tata Steel will continue to hold 100% equity shareholding in TSHP.

Key Highlights

• Achieved highest-ever crude steel production of ~20.8 million tonne and deliveries of ~19.9 million tonne.

• Domestic deliveries were up 9% YoY, led by Indian steel demand growth.

• Tata Steel UK will commence the closure of heavy-end assets in June and proceed with its plan to invest in a state-of-the-art Electric Arc Furnace at Port Talbot.

• India's steel demand continued to improve, while EU demand was subdued.