Tata Steel

The performance for Q3FY13 was dismal to say the least. Its net loss only widened further. In Q3FY12, net loss was at Rs.603 crore; in Q2FY13, it was at Rs.364 crore and now in Q3FY13, it rose to Rs.763 crore.  An over 3% (YoY) drop in net sales, a 78% drop in other income did it in. The company would have been much deeper in the red but for the 3% drop in operating costs, another 3% fall in interest outgo and 9% drop in tax outgo. There was also an exceptional loss of Rs.20 crore resulting from Tata Steel International (Singapore) Holdings Pte selling off its stake in Tata Steel International (Hongkong).

Lower realisations and demand in both domestic as well as Europe pushed the company further into the red. Sequentially, domestic steel realization was down 7% and in terms of sales volumes, that from Europe fell 9% (YoY) and 1.5% (QoQ) and this was blamed on contracting demand and closure of one blast furnace. Tata Steel Europe's operating loss expanded from $78 million in Q3FY13 from $7 million in Q2FY13. Tata Steel’s consolidated net debt is at Rs. 57,981 crore and it plans to raise another 12-13,000 crore to fund its Odisha project. In Q4, its fresh expanded capacity of 3 MT will on stream at Jamshedpur and its second blast furnace will restart at Port Talbot in UK. Yet, on the demand side, the overall outlook looks dim, both in the domestic as well as European markets. This means, one cannot expect very good numbers in Q4 too. Its net loss at end of 9MFY13 stands at Rs.529 crore compared to net profit of Rs.5390 crore for FY12.