Updated January 24th, 2024 at 20:37 IST

Tata Steel records Q3 profit of Rs 522.14 crore driven by strong India demand

The consolidated revenue from operations for the Tata Group company witnessed a 3% decline to Rs 55,311.9 crore in the October-December quarter.

Reported by: Business Desk
Tata Steel Q3 | Image:Tata Steel
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Tata Steel Q3 FY24 results: Tata Steel, one of India's leading steel producers, reported a consolidated net profit of Rs 522.14 crore for the October-December quarter, marking a significant turnaround from the net loss of Rs 2,501.95 crore in the same period the previous year. The robust domestic demand played a pivotal role in offsetting the weaknesses observed in the European market.

This positive development comes after the company reported a net loss of Rs 6,511.16 crore in the second quarter, primarily due to impairment charges. Despite the challenges posed by higher coking coal costs, the steel industry benefited from increased steel prices, fueled by substantial infrastructure spending.

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The consolidated revenue from operations for the Tata Group company witnessed a 3 per cent decline to Rs 55,311.9 crore in the October-December quarter, compared to Rs 57,083.56 crore in the corresponding period of the previous year. On a sequential basis, consolidated revenue from operations slightly decreased by 0.7 per cent from Rs 55,681.93 crore in the previous quarter.

Tata Steel's India segment reported a 2 per cent growth in quarterly revenue, reaching Rs 34,681.90 crore. The company's India unit witnessed a notable increase in crude steel production, standing at 5.32 million tonnes, a 6 per cent rise both quarter-on-quarter (QoQ) and year-on-year (YoY). The consistent strength in Indian steel demand allowed Tata Steel to achieve its 'best-ever 3Q' sales, with domestic deliveries reaching 4.88 million tonnes.

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The Industrial Products & Projects segment experienced a 5 per cent QoQ and six per cent YoY growth in deliveries, with the engineering sub-segment achieving its best-ever quarterly sales. The Automotive & Special Products segment also recorded positive results, with an 8 per cent QoQ increase and a substantial 22 per cent YoY growth in deliveries.

However, the company faced challenges in its European operations, witnessing a 12.5 per cent decline in revenue to Rs 18,141.97 crore. Tata Steel Netherlands reported a QoQ increase in liquid steel production to 1.17 million tonnes, while deliveries reached 1.29 million tonnes, up 5 per cent QoQ. The decision to shut down two blast furnaces in Port Talbot Steelworks in the UK was announced on January 19, potentially affecting up to 2,800 jobs. This move aligns with Tata Steel's efforts to restructure its loss-making UK business in line with its green goals.

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Despite the challenges, Tata Steel remains optimistic about its performance, riding on the wave of strong domestic demand and ongoing efforts to navigate industry dynamics effectively. The company's proactive measures and focus on sustainable practices position it for continued growth in the evolving steel sector.

Tata Steel shares exhibited positive momentum, closing 6.7 per cent higher at Rs 166 per share on the announcement day, indicating a favorable market response to the Q3 results.

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This development unfolds against the backdrop of Crisil's predictions, anticipating the Indian steel sector's third consecutive year of double-digit growth, estimated at 11-13 per cent year-on-year for the current fiscal year.

 

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Published January 24th, 2024 at 20:37 IST