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Tata Steel posts Q3 loss of Rs 1,229 crore: Key takeaways

Tata Steel posts Q3 loss of Rs 1,229 crore: Key takeaways

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Published on date 10th February 2020.

Mumbai: Tata Steel NSE -5.77 % on Friday posted a consolidated net loss in the quarter ended December, compared to profit in the same quarter a year ago, citing a challenging business environment. The steel maker posted a net loss of Rs 1,228.53 crore for the quarter ended December, compared with a net profit of Rs 1,753.07 crore in the same period last year. Its consolidated revenue from operations declined 8.57 per cent YoY to Rs 35,520.41 crore during the quarter under review.

Business Environment: During 3QFY20, global economic growth further slowed down amidst heightened concerns of a US-China trade war, the company said. Regional steel prices were down as steel demand was affected by weaker industrial output in key markets.

However, Chinese apparent steel consumption remained steady and steel exports stabilized below 5 million tons a month. Management commentary: “Steel demand in India is expected to improve on the back of increasing government spending and a revival in the broader economy. Coronavirus does pose a risk and we are closely monitoring the fallout,” said managing director and CEO T V Narendran.

Indian operations: The company’s India steel production stood at 4.47 million tons in 3QFY20 as compared to 4.50 million tons in 2QFY20. India steel deliveries grew 17 per cent QoQ to 4.85 million tons in 3QFY20. Despite 3 per cent QoQ decline in domestic demand, domestic deliveries grew 15 per cent QoQ. European operations: In 3QFY20, Tata Steel Europe liquid steel production grew by around 3 per cent QoQ to 2.51 million tons, while deliveries grew by around 3 per cent QoQ to 2.35 million tons.

Cash and Cash equivalents: The company said its liquidity remains robust at Rs.14,027 crore comprising of cash and cash equivalents of Rs 5,239 crore and undrawn bank lines of Rs.8,788 crore. Debt position: The company’s gross debt during the quarter stood at Rs 1,09,867 crore, while its net debt stood at Rs 1,04,628 crore

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