Tata Steel Q2 result: Standalone profit zooms to Rs 8,843 cr YoY; revenue rises to Rs 34,220 cr

Steel behemoth Tata Steel has reported a standalone net profit for the July-September quarter at Rs 8,843 crore as compared to Rs 9,112 crore in Q1 FY22 and Rs 2,598 crore in Q2 FY21. On a consolidated basis, Tata Steel's profit stood at Rs 12,548 crore in Q2, while consolidated revenue stood at Rs 60,283 crore.

The steel major's quarterly turnover stood at Rs 34,220 crore vs Rs 29,284 crore in the previous quarter and Rs 22,787 crore during the same quarter last year. The adjusted EBITDA for the said quarter stood at Rs 13,877 crore vs Rs 13,595 crore in the previous quarter and Rs 6,017 crore in the same quarter last year.

Tata Steel's consolidated free cash flow for Q2 FY22 was Rs 3,322 crore, despite an increase in working capital of Rs 3,889 crore and dividend payment of Rs 3,020 crore. The company spent Rs 2,191 crores on capex during the quarter, work on the pellet plant, the cold roll mill complex and the 5 MTPA expansion at Kalinganagar is ongoing, said Tata Steel.

Tata Steel's gross debt decreased to Rs 78,163 crore as of the September quarter, with repayments of Rs 11,424 crore in H1 FY22. The company's net debt declined to Rs 68,860 crore.

TV Narendran, Chief Executive Officer & Managing Director of Tata Steel said the company has delivered strong results across key geographies in this seasonally weaker quarter.

"Our steel deliveries in India expanded by 11 per cent, despite a contraction in market demand, which is a testament to the strength of our franchise. We continue to drive value accretive growth in our chosen segments and our performance in key segments such as auto was very robust despite the sector being impacted by the semiconductor shortage. Our European operations have also delivered robust performance underpinned by strong improvement in realisations," said Narendran.

Also read: Tata Steel India delivery up 12% QoQ to 4.64 mn tonnes; crude steel production up 2%

Koushik Chatterjee, Executive Director and Chief Financial Officer, said Tata Steel posted its highest-ever underlying quarterly performance on the back of strong operating and market performance across all geographies. "The operating cash flows continue to be strong despite working capital pressure due to price effect on the coal price increase in recent months. We signed and closed the divestment of our 100 per cent holding in NatSteel Holdings in this quarter to realise around Rs 1,200 crore that resulted in a realised gain of Rs 720 crore for the quarter," he said.

The company said Tata Steel Europe's revenues increased by 11 per cent QoQ and 50 per cent YoY to £2,108 million in Q2 FY22. EBITDA improved 2.2x QoQ to £328 million, which translates to an EBITDA per ton of £153.

Tata Steel said it is pursuing the hydrogen route in IJmuiden, a Dutch port city, and a detailed assessment is underway. This involves the introduction of direct reduced iron (DRI) technology which can make iron using natural gas or hydrogen before it is converted to steel.

During the quarter, Tata Steel completed the divestments of its 100 per cent stake in NatSteel Holdings Pte Ltd Singapore. The merger of Tata Steel BSL with Tata Steel has also been approved by the NCLT, Mumbai bench.

The Tata Steel stock stood closed at Rs 1,300, Rs 1.45 or 0.11 per cent up, as compared to the previous session close of Rs 1,298.55 on the NSE.

Also read: Tata Steel to spend Rs 8,000 cr on capex for India operations in FY22: CEO TV Narendran