Tata Steel posted much better-than-expected Q3FY21 earnings, beating all estimates yet the stock is now in the red, with profit taking coming in and stock moving along with the market trend.

The stock opened 2% higher at Rs.713 and rose further by 3.5% to Rs.724, not too far from its 52-week high of Rs.731. From there it fell and is now almost 2% down at Rs.686 levels.

The company reported its highest ever consolidated quarterly EBITDA, up 53% (QoQ) and 2.6 times on YoY at Rs.9540 crore on the back of improved realisations, 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%.

Its  Profit after tax improved 2.4x (QoQ) and 4.3x (YoY) to Rs.4,011 crore.

The company’s net sales in the period under review stood at Rs 38,806 crore, up 12% (YoY) on improved demand for steel in the domestic market.

The other news is that its balance Sheet de-leverage continued with Net Debt reduction of Rs.18,609 crore in 9MFY21. During the third quarter, the company reduced the leverage by Rs.10,325 crores. As part of the continued de-leveraging strategy further deleveraging is being undertaken in 4QFY21.

Its Free Cash Flow was Rs.12,078 crores during 3QFY21 and Rs.20,588 crores in the first nine months of the current financial year driven by strong operating performance, disciplined capital expenditure and working capital management.

Tata Steel BSL merger with Tata Steel is progressing ahead. The merger of Tata Metaliks and Indian Steel and Wire Products with Tata Steel Long Products in also underway.