homenewsTata Steel Q4 Preview: Price hikes to help improve India operations, Europe to report EBITDA loss
Tata Steel Q4 Preview: Price hikes to help improve India operations, Europe to report EBITDA loss
In the last quarter of financial year 2022-23, Tata Steel's India operations are expected to recover led by prices hikes partially offset by higher input costs. However, Europe operations are expected to report EBITDA loss led by weak demand.
Tata Steel shall declare its fourth quarter earnings on 2nd May, post which, the analyst and institutional investor meeting will be held on 3rd May at 2pm, which can be accessed here.
In the last quarter of financial year 2022-23, Tata Steel's India operations are expected to recover led by prices hikes partially offset by higher input costs. However, Europe operations are expected to report EBITDA loss led by weak demand.
According to CNBC-TV18 poll, consolidated revenues for the fourth quarter are estimated at Rs 58,962 crore due to lower volumes in Europe, lower steel prices and subdued performance of subsidiaries. Earnings before interest, tax, depreciation and ammortisation (EBITDA) is expected to decline 62 percent year-on-year to Rs 5,755 crore, while margins are expected at 9.8 percent versus 21.7 percent in same quarter of last year.
Earlier this quarter, the company declared its India delivery volumes which shows an improvement of 9 percent quarter-on-quarter to 5.15 million tons marking the highest ever quarterly volumes. Europe volumes grew 7 percent sequentially to 2.13 million tons, but is lower than 2.4 million tons when compared on a year-on-year basis.
On the margins front, India operations are expected to improve sequentially, with moderation in coking coal providing some respite. A weaker pricing and demand is expected to have impacted Europe operations in fourth quarter and hence EBITDA/ton is expected to be loss making at $107.
Furthermore, investors shall be closely tracking management commentary on demand and pricing environment along with debt reduction plans post the Neelachal Ispat Nigam Limited (NINL) acquisition.
(Edited by : Vahishta Unwalla)
First Published: May 1, 2023 12:54 PM IST
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