Tata Steel Bottom Line Quadrupled With Enhanced Operating Profit

Tata Steel Ltd is expected to report a year-on-year surge in operating profit for June quarter, driven by better performance in its standalone Indian operations and reduced losses in Europe. The company's bottom line quadrupled, driven by enhanced operating profit. The firm will report earnings on July 31.

According to 10 average brokerage estimates poll, EBITDA is likely to be at Rs 6318 crore, up 22 percent year on year. On a QoQ basis, EBITDA is likely to decline by 4 percent, led by lower sales volumes in India.

Revenue is likely to fall 1.6 percent quarter on quarter while it could rise 3 percent year-on-year to Rs 57,728 crore. On an annual basis, net profit is likely to rise 262 percent to Rs 1,025 crore from Rs 283 crore a year ago. Meanwhile, net profit is likely to drop 15 percent on a sequential basis.

Tata Steel's Q1FY25 production report shows Tata Steel India sales at 4.94 MT, down 9 percent QoQ (up 3 percent YoY) compared to the strong Q4FY24. Europe sales remained strong at 2.21 MT, up 4.2 percent QoQ/YoY, driven by normal operations in the Netherlands. Consolidated sales volume fell 5 percent QoQ (up 4 percent YoY) from the strong Q4FY24. Steel HRC prices in Mumbai were down 6 percent YoY and flat QoQ.

Axis Securities forecasts a 10 percent QoQ decline in India EBITDA per ton, to Rs 14,077/t (up 4 percent YoY), due to reduced operating leverage from lower sales volumes. In Europe, EBITDA per ton loss is expected to narrow YoY to $37/t from $96/t in Q1FY24, with no significant change QoQ. The Netherlands is expected to report positive EBITDA, while the UK remains weak.