Tata Steel European operations EBITDA/tonne surprises positivelyTATASTLLP - 664 Change: 10.35 (1.58 %)
News: For the quarter, on a consolidated basis, Tata Steel reported topline of Rs 69324 crore, up 39% YoY and 14% QoQ, higher than our estimate of Rs 67710 crore. Tata Steel standalone operations reported sales volume of 5.0 Million Tonnes (MT), up 17% QoQ, while Tata Steel European operations reported sales volume of 2.4 MT, up 9% QoQ however down 4% YoY. Tata Steel’s reported EBITDA stood at Rs15030 crore, while adjusted EBITDA stood at Rs15891 crore (our estimate of Rs16632 crore). Ensuing consolidated PAT for the quarter stood at Rs9835 crore, up 37% YoY and 2% QoQ, broadly in line with our estimate of Rs9808 crore.
Views: Tata Steel reported operationally steady set of numbers for Q4FY22. While Tata Steel standalone operations EBITDA/tonne came in lower than our estimate, there was a positive surprise in Tata Steel European operations EBITDA/tonne. Tata Steel standalone operations adjusted EBITDA/tonne stood at Rs23690/tonne, lower than our estimate of Rs25500/tonne (Rs27775/tonne in Q4FY21 and Rs28631/tonne in Q3FY22). Tata Steel European operations reported EBITDA/tonne of ~US$241/tonne, higher than our estimate of US$200/tonne (US$66/tonne in Q4FY21 and US$182/tonne in Q3FY22). On the balance-sheet side, Tata Steel continued to reduce its debt levels, which augured well for the consolidated entity. Tata Steel’s consolidated net debt declined from Rs 75389 crore as on March 2021 to Rs 51049 crore as on March 2022. As on FY22, on a consolidated basis, Tata Steel’s net Debt to EBITDA was at 0.8x (2.44x in FY21) and net debt to equity was at 0.52x (0.98x in FY21).