Tata Steel having rough day

Tata Steel is having quite a day today; after falling 3.5% to an intraday low at Rs.98.15, it remains in the red but has recouped to Rs.100 levels, less than 1% below yesterday’s close of Rs.101.55. There are equal number of buyers and sellers on the counter.

Its 52-week high is at Rs.138.63 and low at Rs.82.71.

The market is disappointed with the company’s Q2FY23 performance. It posted an almost 90% (YoY) drop in net profit at Rs.1297 crore on the back on flat topline growth, higher costs and lower realisation from high-cost inventory.

Revenue from operations was at Rs.59,878 crore v/s Rs.60,387 crore.

Total production was down 3% at 7.56 million tonnes and sales dropped 2% to 7.23 million tonnes.

Costs jumped up 22% led by a sharp 57% rise in raw material expense and a 49% increase in finance costs.

EBITDA was down 67% at Rs.5817 crore while EBITDA per tonne dropped 67% to Rs.8,045 crore.

The company said concerns of a slowdown in key economies, persisting geopolitical issues coupled with seasonal factors led to a volatile operating environment.

Gross debt increased from Rs.82,597 crore to Rs.87,516 crore as this includes the Rs.19,000 crore it paid in Q2 to complete the Neelachal Ispat acquisition. Its Net debt stood at Rs.71,753 crore.

PS: Its quite ironic that the Steel man of India, J J Irani passed away on the same day as Tata Steel declared its Q2 numbers.