Tata Steel Q1 earnings: Here are the key things to watch out for

The most important part for Tata Steel is a geographic break-up. India business – the sales volumes have come in at around 3.87 million tonne. It looks like there is a big growth out there but that is not the case because this quarter, the company has accounted for all of Bhushan Steel’s numbers in terms of sales volumes. In the previous quarter, they have accounted Bhushan Steel’s volumes only for around half of the quarter. So that is explains why there is a growth.

The demand has been quite weak. For the domestic business, the street is looking at the EBITDA per tonne which is likely to come in at around Rs 13,000-13,050 odd. Some estimates go as low as around Rs 12,500-12,700 on a per tonne basis. So there will be a sharp compression on a year-on-year (YoY) basis as well as on a sequential basis.

Revenue seen (RD)2.1 percent at Rs 37,050 crore vs Rs 37,832 crore last year

Operating profit expected (RD) 13 percent at Rs 5,615 crore vs Rs 6,467.6 crore

Margins seen (RD) at 15.2 percent vs 17.1 percent

Profit after tax seen (RD) 30 percent at Rs 1,350 crore vs Rs 1,936 crore

Sales volumes (GU) 14 percent at 3.87 mt vs 3.34 mt

Q1FY19: Bhushan sales accounted for post May 18, 2018

Lower steel prices will hurt profitability