Tata Steel sees visible signs of demand revival

Steel Insights Bureau

Tata Steel’s consolidated revenues in the first 9 months of FY23 were up 3 percent year-on-year (y-o-y) to `1,80,391 crores despite volatile operating environment across geographies.

Consolidated EBITDA stood at `25,472 crores, with an EBITDA margin of 14 percent. Consolidated Profit after Tax stood at `6,509 crores. During the December quarter, consolidated revenues was `57,084 crores. EBITDA was `4,154 crores, with a margin of 7 percent.

“Profitability was affected by sharp drop in realisations and spreads in Europe,” the company said in a release.

Domestic crude steel production touched 5 million tons (mt) in Q3 for the first time with commissioning of Neelachal Ispat Nigam Ltd (NINL).

Executive Director & Chief Financial Officer

Capex status

Tata Steel is presently expanding capacities across multiple sites at Kalinganagar, NINL and the Electric Arc Furnace at Ludhiana in Punjab and at downstream plants across India.

India deliveries stood at 4.74 mt, up 7 percent y-o-y primarily driven by 11 percent growth in domestic deliveries, which has also enabled an improvement in product mix. The company saw record sales of industrial products and projects growing by 15 percent y-o-y basis.

Active engagement and expanded product range led to 17 percent growth in oil and gas, lifting and excavation, preengineered buildings.

Value-added products make up around 40 percent of industrial volumes and supplier of steel for marquee government infrastructure projects across India.

In branded products and retail, microsegmentation is driving demand in the face of market volatility with sales to MSMEs growing by 25 - 30 percent in last 2 quarters. During the 9 months of this year, 36 new products were developed.

The company has spent `3,632 crores on capex during the quarter. At Kalinganagar, phased commissioning of 6 million tons per annum (mtpa) pellet plant has begun while work on 2.2 mtpa Cold Roll Mill complex and 5 mtp expansion is ongoing.

In Punjab, work has commenced on enabling activities with respect to 0.75 mtpa Electric Arc Furnace, an important milestone for Tata Steel’s journey towards reducing emissions.

NINL begun operations and is being ramped up to rated capacity of around 1 mtpa.

Tata Tiscon rebars are being made from NINL billets.

“We continue to invest in capacity growth in India, taking our capital expenditure to `3,632 crores for the quarter and `9,746 crores for the year to date,” Koushik Chatterjee, Executive Director & Chief Financial Officer, said.