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10 Things SteelMint Learned from Tata Steel Q3FY19 Results

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BigMint Bureau

1153 Reads

8 Feb 2019, 19:34 IST

India's steel giant - Tata Steel announced Q3FY19 results today. The investors conference call highlights are mentioned below.

1. Standalone crude steel output up by 2% Q-o-Q basis- Tata Steel's crude steel output went up by 2% on quarterly basis to 4.38 MnT in Q3FY19 as compared to 4.31 MnT in previous quarter.However on yearly basis the same surged by 34% against 3.27 MnT in Q3FY18 amid acquisition and ramp-up of Tata Steel BSL.

2. Steel deliveries decline by 10% in Q3 FY19- Tata Steel India deliveries decline by 10% Q-o-Q basis to 3.89 MnT in Q3FY19 which was 4.32 MnT in Q2FY19. On yearly basis deliveries increased by 18% in Q3FY19 against 3.30 MnT in Q3FY18.

3. Export deliveries slashed by 38% in Q3- Tata Steel export sales slashed by 38% to 0.30 MnT in Q3FY19 which was 0.48 MnT in previous quarter. Meanwhile on yearly basis the same moved down by 6% against 0.32 MnT in Q3FY18.

4.Automotive Branded and Industrial products sales decline in Q3FY19- In Q3FY19 automotive products sales fell by 9%, branded decline by 6% and industrial products decline by 16% against Q2FY19.

5.Bhushan Steel deliveries decline by 19% Q-o-Q- In Q3FY19, Bhushan steel deliveries decline by 19% Q-O-Q to 0.92 MnT against 1.14 MnT in previous quarter.Thus soft demand in domestic market and low sales mainly in automotive,appliance segments and inventory replenishment reduced sales deliveries in this quarter.

Bhushan steel crude steel output was 1.04 MnT inch down by 1% in Q3FY19 which was 1.05 MnT in previous quarter.

Meanwhile EBITDA for the quarter decline by 14% to INR 1,008 Cr in Q3 against INR 1177 CR in previous quarter.

6.Company's EBITDA decrease by 25% Q-O-Q- In India,Tata Steel EBITDA move down by 25% on quarterly basis.In Q3FY19 company reports EBITDA at INR 4,560 Cr as compared to INR 6,113 Cr in previous quarter. However on yearly basis the same inch down by 2% against INR 4,647 Cr in Q3FY18.

7. Steel imports reported jump in Jan'19- Steel imports reported jump on yearly basis to 0.6 MnT in Jan'19 as compared to 0.3-0.4 MnT in the month of Dec. Thus surge in imports leads to correction in domestic steel prices. However global prices declined significantly and domestic prices didn't drop to those levels in turn results to rise in steel imports to India.

8. Demand in auto sector likely to improve in Q4- Demand in auto sector likely to improve in coming quarter as last quarter remained weak due too elections and liquidity issues.However its is anticipated that domestic demand will improve in upcoming quarters.

9. Decline in domestic sales volumes- Company's sales volumes reported significant drop as domestic steel prices were on correction mode which tends to postpone the purchases and results to lower sales last quarter.Thus steelmaker prefer to export more from the month of Nov- December. However steel prices stopped dropping in Feb'19 and demand will pick up slowly by which company will remain on track as per their sales guidance.

10. Steel prices is expected to rebound in Q4- Domestic steel prices is expected to rebound as the demand improves in domestic market.Meanwhile demand is likely to improve post Chinese New Year holidays will also support the steel prices in domestic market.