Tata Steel share price recovered from early losses on Tuesday to trade over a percent higher after the company reported Q1 result in-line with analysts’ estimates. Tata Steel shares gained as much as 1.68% to ₹117.20 apiece on the BSE.
Tata Steel reported a 92% year-on-year drop in its consolidated net profit for the fiscal first quarter ended June 2023 at ₹525 crore, primarily due to weak performance of its Europe operations.
The company had reported a profit of ₹7,714 crore in the year-ago period. Sequentially, consolidated net profit declined 63% from ₹1,566 crore in Q4FY23.
The company’s consolidated total revenue from operations in Q1FY24 fell 6.21% YoY to ₹59,489.66 crore from ₹63,430.07 crore in Q1FY23, impacted due to lower volumes, which were partially offset by higher realisations across geographies.
Read here: Tata Steel Q1 Results: Net profit down 92% on year to ₹633.95 crore
“During the quarter, global economic recovery continued to face headwinds affecting commodity prices including steel. In India, domestic steel demand continued to grow and was up around 10% on YoY basis but steel spot prices moderated in line with global cues,” said T V Narendran, Chief Executive Officer & Managing Director, Tata Steel.
As per the company’s BSE filing, earnings before interest, taxes, depreciation, and amortization (EBITDA) for Q1FY24 stood at ₹6,122 crore and EBITDA margin came at 10%.
The company said that its adjusted EBITDA was at ₹6,238 crore after accounting for changes related to foreign exchange movements on intercompany debt, receivables, and the British Steel Pension Scheme (BSPS).
CLSA said Tata Steel Q1 results were in-line with estimates with a third consecutive quarter of losses in Europe with profitability at $96/t.
The brokerage has an Outperform rating on the stock with a target price of ₹125 per share.
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Morgan Stanley has an Equal-weight rating on the stock with a target price of ₹110 per share. It said the company’s EBITDA was ahead of estimates led by better realisations, partially offset by higher operating expenses.
Meanwhile, consolidated EBITDA missed estimates due to weaker trends at European business, it said.
At 10:10 am, the shares of Tata Steel were trading 1.52% higher at ₹117.20 apiece on the BSE.
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Updated: 25 Jul 2023, 10:15 AM IST