The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products is also underway, the company said.
May 26, 2021
Tata Steel has reported a consolidated net profit, attributable to the owners of the company, at Rs 6,644 crore in the March quarter (Q4) of FY21, against a net loss of Rs 1,481 crore in the corresponding period last year. The revenue from operations jumped 39 percent year-on-year (YoY) to Rs 49,977 crore on the back of higher steel prices and strong volumes, leading to strong operational gains.
“Steel prices in India are cheapest compared to anywhere in the world. So, exporting steel could be a good opportunity and exporters would be most comfortable in the current price scenario. The current domestic steel prices are simply reflecting the demand in the market,” T V Narendran, MD and CEO of Tata Steel, said in the earnings call on Tuesday.
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The steelmaker reported total consolidated revenue of Rs 50,250 crore, including other income of Rs 272.2 crore. Net profit was restricted by exceptional expenses of Rs 991.13 crore. Exceptional items include the provision of Rs 723 crore for impairment of non-current assets and an employee separation compensation of Rs 233 crore. The year-ago quarter had exceptional items of Rs 3,853 crore, a key reason for the loss at the net level in the year-ago period.
Consolidated EBITDA of Rs 14,607 crore, up 135 percent YoY, was the highest-ever consolidated quarterly EBITDA. The consolidated net profit of Rs 7,162 crore in Q4FY21 was also its highest ever, beating the previous high of Rs 4,804 crore in Q2FY09.
Tata Steel has also become second-most profitable in the Tata group, after Tata Consultancy Services (TCS). Tata Steel’s Ebitda is, however, higher than that of TCS.
Tata Steel’s dividend payout in FY21 will also be its highest ever. It announced a dividend payout of 250 percent or Rs 25 per share to shareholders, beating the previous high of Rs 16 per share in FY08. This translates to a total pay-out of Rs 2,862 crore for FY21, beating the previous high of Rs 1,490 crore in FY19. A third of this (Rs 956 crore), will accrue to Tata Sons in lieu of its 33.41 percent stake in the company.
In India operations, the company achieved the highest-ever quarterly crude steel production of 4.75 million tonnes (Mt) in Q4, up 3 percent sequentially. Steel deliveries grew 16 percent YoY to 4.67 Mt in Q4FY21. For FY21, the consolidated top line was at Rs 156,294 crore (up 4.9 percent), Ebitda at Rs 30,892 crore (up 71 percent), and net profit attributable to owners of the firm stood at Rs 7,490 crore (up 381 percent).
Meanwhile, shareholders have approved the merger of Tata Steel BSL with Tata Steel. A joint “Scheme Petition” has been filed with the NCLT to sanction the scheme with effect from April 1, 2019, the company said. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products is also underway, it said.
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With regard to inorganic growth options, the management informed the company would be interested in long product facilities such as Neelachal Ispat Nigam and is not keen on flat product inorganic growth route as the existing facilities at Kalinganagar and Angul provide enough room to up capacity. As part of organic expansion, the company’s pellet plant and cold roll mill complex at Kalinganagar are under construction. The 5-Mt expansion project has been restarted.
