India: Tata Steel Q2FY'22 highlights

Indian steel giant Tata Steel reported a significant increase in its export sales in the second quarter of FY'22 due to sluggish domestic demand. Export volumes stood at 0.71 million tonnes (mn t) in the quarter as against 0.65 mn t in the last quarter (Q1FY'22).

However, a year ago, the company exported around 1.19 mn t as India was observing region-wise phased lockdowns.

Crude steel production up marginally: Tata Steel's crude steel production inched up by 2% to 4.73 mn t in Q2FY'22 as against 4.63 mn t in Q1FY'22. Similarly, on an annual basis, output moved up 3% against 4.59 mn t in Q2FY'21.

Sales volume rise 11% q-o-q: The steel major reported 11% growth in sales despite dull demand amidst seasonal factors. Sales volume stood at 4.58 mn t in Q2FY'22 compared to 4.15 mn t in Q1FY'22.

Steel deliveries declined 9% on a y-o-y basis against 5.05 mn t as there was a build-up of inventories in Q2 of the last fiscal year.

Automotive sales at 0.66 mn t in Q2: Automotive sales of Tata Steel during Q2 moved up to 0.66 mn t, an increase of 18% as against 0.56 mn t in the previous quarter. While, a year ago, automotive sales were at 0.47 mn t in Q2FY'21.

"We continue to drive value accretive growth...auto was very robust despite the sector being impacted by the semiconductor shortage" said T.V Narendran, CEO & MD, Tata Steel.

Phase II expansion plans: The company is looking forward to making additions in the pellet plant and CRM complex at its Kalinganagar works, under phase II expansion.

• A 6-mntpa pellet plant willl help the manufacturer in saving costs.
  
  
• To enrich the product mix, Tata Steel undertook the 2.2 mntpa CRM complex expansion.
  
  

These installations are likely to be commissioned in the second quarter of next financial year as per the concall.

EBITDA increases marginally by 1% q-o-q: Tata Steel achieved its highest-ever standalone EBITDA of INR 13,557 crore in Q2FY'22, up 1% against INR 13,370 crore in Q1FY'22. On an annualised basis, the EBITDA reported a sharp growth against INR 5,824 crore in Q2FY'21.

Tata Steel Long Products performance:

• Crude steel production up 2% q-o-q to 0.175 mn t in Q2 against 0.172 in the previous quarter. On a yearly basis output jumped 4% against 0.168 mn t in Q2FY'21
  
  
• Long steel sales 0.168 mn t in Q2, showed an increase of 4% q-o-q against 0.162 mn t in Q1. However, sales volumes went down 9% y-o-y against 0.189 mn t in the same period last year.
  
  

Tata Steel South East Asia performance: Production and sales declined q-o-q primarily due to lockdown in Malaysia and Thailand amidst the spread of COVID-19

• Saleable steel production stood at 0.48 mn t in Q2FY'22 in Q2FY'22 as against 0.59 mn t a quarter ago, down by 19%.
  
  
• Sale volumes slid 6% to 0.59 mn t in Q2 compared to 0.63 mn t in Q1FY'22.
  
  
• EBITDA rose to INR 428 in Q2 against INR 407 crore in Q1 on the back of improved prices.