Tata Steel Q3 Preview: Profit May Rise On Higher Volume, Realisation
The steel company may report a net profit of Rs 1,411 crore in the December quarter, as compared with a loss of Rs 2,502 crore a year ago, according to Bloomberg estimates.
Tata Steel Ltd. is expected to return to profit in the third quarter ended December 2023.
The Tata Group's flagship steel company may report a net profit of Rs 1,411 crore in the December quarter, as compared with a loss of Rs 2,502 crore a year ago, according to consensus estimates of analysts tracked by Bloomberg. Revenue may increase 1.3% to Rs 59,303 crore.
Tata Steel Q3 FY24 Preview: Bloomberg Estimates (YoY)
Revenue may rise 1.27% to Rs 59,303 crore.
Ebitda may increase 30.8% to Rs 5,584 crore.
Margin may improve to 9.4% vs 7.1%.
Net profit may rise to Rs 1,411 crore vs Rs 2,502 crore loss.
However, on a sequential basis, revenue is expected to clock in at 6.5% growth, while Ebitda is expected to rise 30.8% in the December quarter, aided by higher volume and improved realisation.
“We estimate Tata to post a Rs 1,200/tonne sequential increase in Ebitda on the back of higher volume by 1% QoQ, an increase in realisation of Rs 1,000/tonne offset by a $10/tonne increase in coking coal prices,” said Centrum in its note on metals and minings overview for Q3 FY24.
Raw material and weaker steel prices suggest downward pressure on steel margins from Q4 FY24, Kotak said in a note.
The company's consolidated production may have risen 2.9% year-on-year to 4.88 million tonne in Q3, led by a rise in domestic deliveries, offsetting the operational issues in the U.K..
The focus now shifts to the company’s Europe operations, which, as stated by Yes Securities, have been a drag on the company’s financials since its acquisition back in 2007. .
“With the company’s announcement of receiving the U.K. government’s support for the restructuring of the company’s operations in the U.K., we see a turnaround in the business as highly likely.”
In a recent turn of events, Tata Steel announced it will shut down two blast furnaces at Port Talbot, South Wales, in a phased manner with the aim of transforming its U.K. business.
