Tata Steel India reports Rs. 411 cr profit for Q1 FY21

Business, Corporate, Jamshedpur, Jharkhand No Comments on Tata Steel India reports Rs. 411 cr profit for Q1 FY21 901

Jamshedpur, Aug 14:  Tata Steel India’s profit after tax from continuing operations for the quarter ended June 30, 2020 stood at Rs. 411 crore as compared to Rs. 1,570 crore of the corresponding quarter of the previous financial year. On a standalone basis, Tata Steel reported a net profit of Rs 1,193.27 crore for the quartered ended June 30, 2020, as compared to Rs 1,538.99 crore of the corresponding quarter a year ago. This performance is despite a challenging quarter amidst the Covid-19 pandemic situation. Turnover for the quarter stood at Rs. 12,689 crore during the June 2020 quarter as compared to Rs. 21,129 crore of the same period last fiscal.

 India numbers consist of Tata Steel Standalone, Tata Steel BSL Limited (TSBSL) and Tata Steel Long Products Limited (TSLP) on proforma basis without inter-company.

Tata Steel India and its key subsidiaries have successfully countered the closure of the domestic market during the lockdown period by leveraging its global network and exporting more than 1.46 million tons during the quarter. This also limited the decline in our India steel deliveries to 27% QoQ as compared to the 55% QoQ drop in overall India steel demand.

T. V. Narendran, CEO & Managing Director, Tata Steel, said: “During the quarter, we recalibrated our operations and our sales across geographies in line with underlying regulatory and market conditions. While this had an adverse impact on our volumes and our margins, we were successful in mitigating the impact as we pivoted the business towards export markets and successfully generated free cashflows despite adverse market conditions. Economic activity is gradually recovering. In India, we have ramped-up our capacity utilisations to 90% levels with total sales in June exceeding FY20 average monthly sales. We are further ramping up capacity utilisation and increasing domestic sales which will lead to an improvement in our margins in coming quarters. In Europe, spreads are at unsustainably low levels but are expected to improve going forward. We are also engaged with respective governments in UK and Netherlands for their support. While the risk of further COVID-19 outbreaks remains, we are cautiously optimistic that the worst is behind us. We continued to remain extremely focused on cashflows and liquidity management through this crisis.”

Koushik Chatterjee, Executive Director and CFO, Tata Steel, said: “Tata Steel responded very swiftly to the pandemic in April and despite the national lock down in India, the company remained focus on its cash flow management to generate a free cash flow quarter and maintained its net debt at the March 2020 level. This was achieved through cross functional co-ordination and cash war room initiatives covering fixed cost reduction, working capital management through better inventory management, focus on debtors, working with suppliers and other initiatives. This enabled the company to generate free cash flow of Rs.700 crores post capex and other obligations. Even in a challenging quarter the company has generated a 14% EBIDTA margin at standalone level and a positive EBIDTA at consolidated level.”

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