India : Tata Steel Deliveries Up 4% in Q2 FY20

Tata steel released its Q2FY20 financial results today. The key takeaways are mentioned below:

1: Company's crude steel output stable on Q-o-Q basis- Company's crude steel production remained stable at 4.50 MnT as against Q1 FY'20.Meanwhile, the same witnessed a growth of 5% in Q2 FY'20 over 4.30 MnT in Q2 FY'19.

2: Company's deliveries rose by 4% Q-o-Q- Company's deliveries ascended by 4% to 4.13 MnT in Q2 FY'20 over 3.96 MnT in Q1 of the current fiscal.

Company was able to successfully maintain its sales volumes in branded products & retail segment and Industrial product & projects segment. The sharp slowdown in the automotive sector,particularly in the commercial vehicle segment, was offset by higher exports.

However, on a yearly comparison, the same witnessed fall of 4% in Q2 FY'20 as against 4.32 MnT in Q2 FY19.

3: Company's turnover decline by 4% in Q2 FY'20- The company's turnover fell by 4% to INR 20,204 Cr in Q2FY20 as compared with INR 21,129 Cr in Q1FY20.However, the same tumbled by 16% in Q2 FY'20 in contrast with INR 23,980 crores in Q2 FY'19.

4: Adjusted EBIDTA descended by 25% on a quarterly premise-The company's Indian operation's adjusted EBITDA for the Q2 FY'20 was INR 3,817 crores, slashed by 25% in contrast with INR 5,117 crores in the previous quarter.

5: Tata Steel Kalinganagar phase II expansion- Tata Steel Kalinganagar phase II expansion is underway.The cold roll mill complex and pellet plant have been prioritized, which will allow for greater value addition and drive cost reduction.

6. Tata Steel Long Products completed the acquisition of Iron Ore - Tata steel long products acquired iron ore mines during July 2019, though ore supplies from the same were delayed due to heavy monsoons. It continues to steadily work on integration and stabilization of the newly acquired facilities and to drive improvements in various operating parameters.

7. Tata Steel exploring alternative business models for Chrome ore - The Sukinda chromite mine lease expires on March 31, 2020. As the Odisha government has not yet notified the auction of this mine. Tata Steel is working towards closing mining at Sukinda as well as associated operations in a smooth and responsible manner. Tata Steel is also exploring alternative business models for its chrome ore business to ensure continuity in serving out long term customers globally.

Tata Steel Q2FY20 Results-

Source: Company reports, SteelMint Research