Tata Steel Q3 Results Review - Lower Raw Material Costs Boost Ebitda Margin: Systematix

Systematix Report

Tata Steel Ltd.'s Q3 FY24 cons. adjusted. Ebitda of Rs 63.3 billion (plus 55%/+47% YoY/QoQ) was 43% above our estimate due to lower raw material costs and better India realisations.

India operations posted Ebitda of Rs 83 billion (plus 67% YoY, plus 21% QoQ) while Tata Steel Europe operations reported Ebitda loss of Rs 29 billion (versus Rs -16 billion/-25 billion in Q3 FY23/Q2 FY24). Indian operations reported sales volumes of 4.9mt (plus 3% YoY, +1% QoQ) and consolidated volumes were 7.1mt (-1% YoY and flat QoQ).

India net sales realisation was $862/trillion (+3%/+1% YoY/QoQ). India and TSE operations reported Ebitda margins of $204/trillion (plus 60% YoY and plus 19% QoQ) and $180/ trillion (versus $95/-155/trillion in Q3 FY23/Q2 FY24).

Consolidated net debt was broadly flat QoQ at Rs 774 billion at the end of the quarter; overall net debt increase during 9MFY24 was ~Rs 96 billion. Capex during the quarter was Rs 47 billion versus Rs 46 billion in the previous quarter, in line with the annual guidance of ~Rs 160 billion, majorly towards the 5mt Kalinganagar brownfield expansion where phased commissioning has commenced.

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