Tata Steel Q3 Results Review - Earnings Beat Led By Indian Operations; Europe Struggles: Motilal Oswal

Motilal Oswal Report

Standalone performance

Tata Steel revenue increased 2% YoY to Rs 347 billion, which was in line with our estimate of Rs 343 billion. Standalone Alloy Steels Plant was down by Rs 2,851/tonne YoY to Rs 71,069/tonne (Rs 437/tonne above our estimate of Rs 70,633/tonne).

Ebitda jumped 61% YoY to Rs 82 billion, which was above our estimate of Rs 69 billion; Ebitda/tonne improved by Rs 5,716/tonne YoY to Rs 16,905/tonne, which was Rs 2,725/tonne above our estimate of Rs 14,180/tonne.

The beat was due to the movement in inventory value of chrome ore, which primarily drove the decline in raw material (input) costs.

APAT surged 96% YoY to Rs 46 billion, 19% above our estimate of Rs 39 billion.

Standalone production stood at 5.1mt (up 8% YoY), and TATA posted the best ever Q3 sales at 4.9mt (up 6% YoY), in line with our estimate.

Domestic crude steel production (including all domestic subsidiaries) was up 6% YoY at 5.3mt.

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