Tata Steel posted its first quarter profit at Rs 633.95 crore, down 91.8 per cent, from Rs 7,764.96 crore during the first quarter of FY23. “Profitability was affected by non-cash deferred tax charge on account of buy-in transaction at British Steel Pension Scheme. With this, the insurance buy-in of BSPS has been completed, successfully derisking Tata Steel UK,” the company said in a regulatory filing. It posted revenue from operations at Rs 59,489.66 crore, down 6.2 per cent as against Rs 63,430.07 crore in the corresponding quarter of FY23. Net debt stood at Rs 71,397 crore with the group liquidity at Rs 30,569 crore.
Tata Steel’s performance across markets and growth plans
However, the company is working towards scaling up to capitalise on the “India growth opportunity” and is putting in investments to drive “sector leading returns”. Tata Steel is aiming for 2x capacity growth in India by 2030. Tata Steel has spent Rs 4,089 crore on capital expenditure during the quarter. “Work on 5 MTPA expansion at Kalinganagar and EAF mill of 0.75 MTPA in Punjab is progressing,” it informed.
“I am happy to share that Neelachal Ispat Nigam Limited has begun to stabilise and is operating close to rated capacity within just 9 months of acquisition. The 5 MTPA expansion at Kalinganagar is underway with facilities getting commissioned in a phased manner. This is an important milestone in our journey to grow to 40 million tons and will aid in further consolidating our market position in India,” said TV Narendran, Chief Executive Officer & Managing Director, Tata Steel.
Tata Steel said that its India revenue for the quarter was at Rs 34,901 crore and EBITDA was at Rs 7,514 crore. Its crude steel production was around 5 million tons , up 2 per cent on-year driven primarily by ramp up at Neelachal Ispat Nigam Limited. Deliveries during the quarter stood at 4.8 million tons, 18 per cent higher on YoY basis on the back of rise in domestic deliveries. “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 per cent on YoY basis but steel spot prices moderated in line with global cues. Tata Steel delivered steady performance, with India crude steel production of around 5 million tons,” said TV Narendran.
For its Europe business, Tata Steel posted revenue at £2,083 million and EBITDA loss stood at £153 million. “The planned relining of BF6 at Tata Steel Netherlands commenced in April and this has led to a drop in crude steel production. Liquid steel production was 1.79 million tons while deliveries stood at 1.99 million tons,” the company said.
“In Europe, margins were broadly similar on a QoQ basis as rise in revenue per ton was offset by lower volumes and elevated input costs. In the UK, the buy-in transaction for the residual liabilities of British Steel Pension Scheme has been completed, successfully derisking Tata Steel UK,” said Koushik Chatterjee, Executive Director and Chief Financial Officer, Tata Steel.
Tata Steel’s sustainability drive
Tata Steel has announced its major sustainability objectives including Net Zero Carbon by 2045, Net Zero Water consumption by 2030, improving Ambient Air Quality and No Net loss in Biodiversity by 2030. “Sustainability is at the core of our strategy which includes providing comprehensive disclosures. We recently published our first Business Responsibility and Sustainability Report and are actively involved in the development of global and national standards with respect to sustainability disclosures,” said Koushik Chatterjee.
Meanwhile, TV Narendran said that Tata Steel is also engaged in discussions with technology providers and the government for transitioning to greener steel.
Tata Steel had, in the regulatory filing, also said that the company has re-appointed TV Narendran as the chief executive officer and managing director of Tata Steel Limited for a period of five years effective September 19, 2023 through September 18, 2028. His present tenure as CEO & MD will conclude on September 18, 2023.