Tata Steel Ltd.'s second-quarter profit plunged missing estimates as high-cost inventory hurt realisation and slowdown fears gripped the global economy.
The steelmaker recorded an 87% year-on-year decline in its consolidated net profit for the quarter ended September at Rs 1,514.4 crore, according to its exchange filing. That compares with the Rs 3,154.7 crore consensus estimate of analysts tracked by Bloomberg.
The company's revenue for the period under review fell 1% to Rs 59,877.5 crore. Analysts had estimated Rs 56,321.5 crore.
Tata Steel Q2 FY23 Highlights (Consolidated YoY)
Ebitda declined 62% to Rs 6,271 crore, compared to an estimate of Rs 7,485.87 crore.
Ebitda margin fell to 10.5% from 27.5%, against a forecast of 13.3%.
"Concerns about slowdown in key economies, persisting geopolitical issues coupled with seasonal factors led to a volatile operating environment. Despite these headwinds, Tata Steel registered best-ever domestic sales in India," TV Narendran, chief executive officer and managing director at Tata Steel, said in the exchange filing.
According to its Chief Financial Officer Koushik Chatterjee, utilisation of high-cost inventory of raw material and steel coincided with a drop in realisations, resulting in margin decline across geographies.
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