On a consolidated basis, the steel major reported net profit at Rs 4,010.94 crore in Q3 December 2020 compared with net loss of Rs 1,228.53 crore in Q3 December 2019.
Net sales jumped 11.6% to Rs 38,805.91 crore in Q3 FY21 over Q3 FY20. Pre-tax profit during Q3 FY21 was at 5,582.60 crore as against pre-tax loss of Rs 607.49 crore in Q3 FY20. Tax expense for the quarter soared 572.70% to Rs 1,320.71 crore as against Rs 196.32 crore in Q3 December 2019. The Q3 result was declared post trading hours yesterday, 9 February 2021.Consolidated EBITDA improved 53% QoQ and 161% YoY to Rs 9,540 crore, with improved realization across key entities. The company generated free cash flow of Rs 12,078 crore in Q3FY21, driven by strong operating performance and better working capital management. The company said it continues to prioritize on capital expenditure. It spent Rs 1,394 crore on capex during the quarter. The company has decided to restart work on Pellet plant and Cold Roll Mill complex at Tata Steel Kalinganagar. Both the Pellet plant and Cold Roll Mill complex, once completed, will expand margin.
As part of the enterprise deleveraging plan, Tata Steel has completed reduction of net debt by Rs 18,609 crore in the first nine months of the current financial year. During the third quarter, the company reduced the leverage by Rs 10,325 crore. As part of the continued de-leveraging strategy further deleveraging is being undertaken in Q4 FY21.
Consolidated production grew 3% to 7.20 million tonnes in Q3 December 2020 from 6.99 million tonnes in Q3 December 2019.
In India, crude steel production stood at 4.60 million tons in Q3 FY21, registering a 3% Y-o-Y (year-on-year) growth from 4.47 million tons in Q3 FY20. Domestic deliveries grew 8% Q-o-Q (quarter-on-quarter) and 4% Y-o-Y to 4.16 million tons. Exports shrank below 11% of overall deliveries. Sales witnessed strong momentum but was constrained by lower opening inventory. Tata Steel achieved the highest ever quarterly EBITDA of Rs 8,811 crore with 46% Q-o-Q and 114.32% Y-o-Y growth, driven by higher prices, better product mix, lower exports and operating efficiency initiatives. This translates into an EBITDA per ton of Rs 18,931 and an EBITDA margin of 34.9%.
T V Narendran, the chief executive officer (CEO) & managing director (MD) of Tata Steel, said that: "The recovery in the global and Indian economy has led to sharp improvement in steel demand in India. We pivoted our deliveries to domestic markets, to cater to the requirements of our local customers by reducing exports. All the segments, especially automotive, have performed extremely well supported by our continuous focus on strong customer relationships, superior distribution network, brands and new product developments. We are also making good progress on our various initiatives to de-risk the business while our digital marketing platforms are helping us reach new markets and be future ready. The investments in infrastructure and recent policy developments, to drive economic growth, should drive steel demand in India. Given strong market conditions and our success with deleveraging, we have restarted work on the pellet plant and the CRM complex at Kalinganagar which will help in reducing costs and improving revenues."
"In Europe, our underlying performance has improved quarter on quarter while the reported EBIDTA was negatively impacted by few one offs. We remain committed to arrive at a strategic and sustainable solution for Tata Steel Europe, though in the immediate term, we will focus upon business performance and cash flows," he added.
Koushik Chatterjee, executive director and CFO, said: Continuing with the recovery from the deep impact of the pandemic in the first quarter of the financial year, Tata Steel has delivered one of the best financial performance during this quarter with the highest ever consolidated EBITDA of Rs.9,540 crores and free cash flows of over Rs 12,000 crores on the back of strong underlying operating performance of the India business, sharp focus on capital allocation and working capital management. All our operating hubs in India have performed exceptionally well with the stand alone EBIDTA margin at 37.5%. Our key subsidiaries Tata Steel BSL and Tata Steel Long Products have also reported the highest ever profitability in recent years.
Tata Steel group is among the top global steel companies with an annual crude steel capacity of 34 million tonnes per annum. It is one of the world's most geographically-diversified steel producers, with operations and commercial presence across the world.
Shares of Tata Steel were down 0.83% at Rs 693.75. The stock hit a high of Rs 724.40 and a low of Rs 692.60 in early trade.
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