Tata Steel rose 1.11% to Rs 1313.35 after the company recorded a consolidated net profit of Rs 12,548 crore in Q2 FY22 as against a net profit of Rs 9,768 crore in Q1 FY22, registering a growth of 28.5% on QoQ basis.
Total revenue from operations rose by 12.9% QoQ to Rs 60,283 crore during the quarter. The company said that revenues improved across key entities with increase in realisation across geographies and higher deliveries at India, partially offset by lower deliveries at Europe.
Raw material cost increased by 10.8% to Rs 22,218 crore in Q2 FY22 from Rs 20,044 crore in Q1 FY22. The increase was primarily due to increase in purchased iron ore and coal consumption cost across key entities, including higher purchase of finished & semi-finished goods.
Adjusted EBITDA improved by 12.1% QoQ to Rs 17,810 crore in the second quarter. Adjusted EBITDA per ton in Q2 FY22 was Rs 24,112, up by 7.8% from Rs 22,366 in Q1 FY22.
Profit before exceptional items and tax in Q2 FY22 was Rs 13,604 crore, up by 11% from Rs 12,259 crore in Q1 FY22.
The company recorded an exceptional gain of Rs 516 crore during the quarter, realized on account of sale of NatSteel operations and was partially offset by charge on employees separation scheme.
The steel maker's net profit and revenue have risen by 7.5 times and 54.8%, respectively, in Q2 FY22 as compared with Q2 FY21.
While steel production fell by 1.4% to 7.77 million tons, steel deliveries increased by 3.9% to 7.39 million tons in Q2 FY22 over Q1 FY22. As compared with Q2 FY21, the steel production is higher by 7.2% but deliveries are lower by 6.8%.
Consolidated free cash flow was Rs 3,322 crore during Q2 FY22, despite an increase in working capital of Rs 3,889 crore and dividend payment of Rs 3,020 crore.
The company spent Rs 2,191 crore on capex during the quarter, work on the pellet plant, the cold roll mill complex and the 5 MTPA expansion at Kalinganagar is ongoing.
Gross debt decreased to Rs 78,163 crore with repayments of Rs 11,424 crore in H1 FY22. Net debt declined to Rs 68,860 crore. Net debt to EBITDA improved to 1.21x; net debt to equity improved to 0.79x.
T V Narendran, chief executive officer & managing director, said: Tata Steel has delivered strong results across key geographies in this seasonally weaker quarter. Our steel deliveries in India expanded by 11% despite a contraction in market demand which is a testament to the strength of our franchise. We continue to drive value accretive growth in our chosen segments and our performance in key segments such as auto was very robust despite the sector being impacted by the semiconductor shortage. Our European operations have also delivered robust performance underpinned by strong improvement in realizations. We are watchful of the elevated coal prices and high energy cost as key risks to margins going forward.
We took another step in our sustainability journey and commissioned 5 TPD CO2 capture plant at Jamshedpur; first in India by a Steel company to extract CO2 directly from Blast Furnace gas. We continue to progress on our stated goals of expanding and consolidating our operations in India. Our 5 MTPA TSK phase II expansion including the pellet plant and CRM complex is progressing well and the merger of Tata Steel BSL with Tata Steel will be completed shortly. We have recently won the high quality Gandhalpada iron ore mines which helps us achieve raw material security beyond 2030. In line with our capital allocation strategy, we recently exited our operations in Singapore through the sale of NatSteel.
Tata Steel group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum.
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