Tata Steel has nerves of steel; shows recovery

Indian steel giant, Tata Steel has posted a net loss for the second straight quarter but its losses narrowed as compared to the losses it incurred in the same quarter last year. All in all Tata Steel saw a recovery in Indian operations and decline in European losses.

The loss was led by negative exceptional items, specifically the non-cash written down value of fixed assets and voluntary employee separation scheme.

Company’s consolidated net sales have increased by 4.8 per cent at Rs 29164.37 crore from Rs 27818.73 crore in the last quarter. The revenues from steel business alone have risen by 4.5 per cent to Rs 28032.50 crore. EBITDA has given an exceptional rise of 184 per cent to Rs 2205.24 crore as against Rs 775.68 crore. Company has posted a net loss of Rs. 3213.76 crore as against a loss of Rs 2127.23 crore in Q3FY16.

Year on Year results show that company’s net sales have plunged 12.5 per cent from Rs 33336.81 crore made during the corresponding quarter of the last year. EBITDA has risen by 42.9 per cent from Rs 1542.97 crore. Net loss saw a recovery in Q4FY16 as compared to the loss it made in Q4FY15 which was quoted at Rs 5702.28 crore.

On a yearly basis Company’s net sales have seen a drop of 16.2 per cent from Rs 138318.91 crore to Rs 115951.74 for the year ended March 2016. Net profits have seen a decline of 22.3 per cent to Rs 3049.32 crore as against Rs 3925.52 crore.

Now all eyes are on the disposal of U.K steel business by Tata Steel, which has already received 7 bidders. If Tata Steel gets good terms of sale, it would boost its balance sheet in the near term.
The stock is trading flat at Rs 324 today.