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Tata Steel Q4FY22 Review: Mixed bag; European operation surprises positively

ICICIdirect Research 06 May 2022 DISCLAIMER

What’s Buzzing

Tata Steel reported a steady consolidated operational performance in Q4FY22 wherein EBITDA per tonne of European operations came in higher than our estimate. However, EBITDA per tonne of domestic operations comes in lower than our estimate.


For Q4FY22, Tata Steel’s European operation EBITDA/tonne was at US$241/tonne, which came in more our than estimate of US$200/tonne (for Q4FY21 Tata Steel European operations EBITDA/tonne was at US$66/tonne and US$182/tonne in Q3FY22). However, Tata Steel standalone operations EBITDA/tonne for Q4FY22 was at Rs 23690/tonne, lower than our estimate of Rs 25500/tonne (EBITDA/tonne of Rs 27775/tonne in Q4FY21 and Rs 28631/tonne in Q3FY22).

Our Perspective

Both global and domestic steel prices have been on an upturn post the Russia Ukraine conflict. For Q1FY23E, for Indian operations blended steel realisations are expected to be higher by ~Rs 8000-8500/tonne compared to Q4FY22. For Q1FY23E, coking coal consumption cost for Indian operations is expected to be ~US$100/tonne higher compared to Q4FY22. For Q1FY23E, for Tata Steel European operations, blended realisations are expected to increase by ~Euro60/tonne QoQ (compared to Q4FY22). For Q1FY23E, coking coal consumption cost for European operations is expected to be ~Euro50-60/tonne higher compared to Q4FY22. Hence, healthy price increase was witnessed sequentially for both domestic as well as European operations that would be able to compensate for the increase in input costs. Hence, for Q1FY23E, the EBITDA/tonne of both standalone and European operations is likely to be maintained at levels similar to Q4FY22.

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