Tata Steel Q3 net surges 5-fold to Rs1,294 cr on volume growth

Tata Steel Ltd has reported a five-fold jump in its fiscal third-quarter net profit on the back of strong volume growth in the domestic market and a hike in steel prices. For the quarter ended 31 December 2017-18, Tata Steel reported a net profit of Rs1,294 crore ($200.99 million), compared with Rs243 crore in the comparable quarter of the previous fiscal, the company stated in a release.

Consolidated revenue from operations grew 15 per cent to Rs33,447 crore, compared to Rs 27,684 crore in year-ago.

Tata Steel said its India business showed a 10.6-per cent growth year-on-year at Rs15,596 crore and European sales grew 20.7 per cent to Rs14,693 crore, while revenue from Indian operations grew 22 per cent.

Consolidated revenue during the quarter increased by 20.8 per cent to Rs33,447 crore compared with Rs27,684 crore in year-ago, quarter.

Quarterly steel deliveries were up nearly 8 per cent at 6.56 million tonnes, with domestic market accounting for about 50 per cent of the total.

"Global steel prices have been buoyant with improved trade position in China along with cost push from raw materials," chief executive officer T V Narendran said.

The company also incurred exceptional charges of Rs1,115 crore on provisions in respect of certain demands and claims from regulatory authorities in India.

Tata Steel said its India business reported earnings before interest and tax (EBIT) growth of 37 per cent at R 4,647 crore and Europe business reported an EBIT degrowth of 10.6 per cent at Rs632.2 crore compared to same quarter last year.

Other income in Q3 grew 74 per cent to Rs226 crore compared to year-ago quarter.

Tata Steel said its South East Asia operations grew 23.4 per cent year-on-year to Rs2,413.6 crore with EBIT rising 54.5 per cent to Rs187.1 crore for the quarter ended December 2017.

"Other Indian trade operations business showed a 48-per cent growth YoY with EBIT rising 60 per cent while other trade related operations business declined 9.5 per cent but posted EBIT at Rs360.13 crore against EBIT loss of Rs466.65 crore YoY," it added.

Liquid steel production in Europe increased by 1 per cent to 2.67 million tonnes while steel deliveries in Q3 rose 4 per cent to 2.44 million tonnes.

Revenues in terms of pound sterling were higher by 18 per cent, reflecting higher prices.

Tata Steel said its gross debt decreased by Rs1,658 crore to to Rs88,601 crore since the quarter ended September 2018.

The liquidity position of the group remains robust with approximately Rs22,544 crore, comprising Rs12,681 crore in cash and Rs9,863 crorore in undrawn credit lines.