Tata Steel
The company beat most estimates and posted a set of much better numbers. YoY, it is a turnaround but QoQ, net profit slipped. The company ended Q2FY14 with a 7% (YoY) rise in net sales at Rs.36,370 crore. Operating costs led by raw material, freight and handling charges, employee cost, all together was pushed up by 4% at Rs.1067 crore. EBITDA was up sharply by 54% at Rs.3784 crore. The company’s interest outgo for the quarter was at Rs.1067 crore, up 8% (YoY) and up 7% (QoQ). The company posted a consolidated net profit at Rs.917 crore v/s net loss of Rs.364 crore in Q2FY13 but QoQ, net profit slipped 19%. But given the fact that this is seasonally the weakest quarter, the numbers are gratifying.
Like Tata Motors, today it the overseas Europe company which contributes to the growth of the company. Europe, for current Q2 roped in a turnover of Rs.21,149 crore, Indian operations contributed Rs.9921 crore and SE Asia was at Rs.4179. Turnover from Europe, India and SE Asia have all grown both annually as well as sequentially. The improvement in EBITDA from Europe at Rs.554 crore v/s loss of Rs.40 crore (YoY) was due to revival of production following the reopening of the Port Talbot blast furnace and from the continuing efforts to reduce costs and make the European operation an all-weather business. SE Asian operations could have been much better but for the furnace shutdown in Singapore, which came back into operation from August. Volumes improved significantly at both NatSteel and the Thai operations.
Reserves as at 30th Sept 2013 stood at Rs.39,671 crore. Cash held was at Rs.11,236 crore but it is the gargantuan net debt which is worrisome at Rs.64,334 crore v/s 61,289 crore at end of Q1FY14 and Rs.55,421 crore at end of FY13. With interest rates expected to only go up further , huge interest payout each qaurter of over Rs.1000 crore is indeed a point to note.