India: Tata Steel's production, sales fall q-o-q in Q1FY'25
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Tata Steel's production and sales volumes decreased q-o-q in first quarter of financial year 2025 (Q1FY'25) due to elections and heat waves. During the quarter, the company allocated INR 4,715 crore towards capital expenditures, and for the ninth month of financial year 2024 (9MFY'24), the total capital expenditure amounted to INR 13,357 crore.
Project updates
The 5 MTPA expansion project at Kalinganagar is progressing according to schedule, with the blast furnace slated to commence operations in September 2024. Pre-operational activities, including the heating of blast furnace stoves and coke oven batteries, are underway as planned. Additionally, commissioning of the Continuous Annealing Line for the 2.2 MTPA CRM complex is advancing smoothly, targeting a start-up in August 2024.
Other highlights:
Production falls q-o-q: Tata Steel India's production decreased by 2.4% q-o-q, totaling 5.27 mnt in Q1 FY25, compared to 5.4 mnt in the previous quarter (Q4FY24). However, on a year-on-year basis, production increased by 5% from 5.02 mnt in the same quarter of the previous year (Q1'FY24).
Sales decline q-o-q: The company's sales experienced a 9% q-o-q decrease, reaching 4.94 mnt in Q1FY'25 compared to 5.42 mnt in Q4FY'24. On an annualised basis, this reflected a 3% growth as opposed to 4.79 mnt in the corresponding period last year (CPLY).
Export volumes exhibited a notable decline, dropping by 62% q-o-q to 0.19 mnt in Q1FY'25 from 0.5 mnt in Q4FY'24. On a y-o-y basis, exports declined by 24%, down from 0.25 mnt in the CPLY.
In the domestic sales segment for the current quarter, the automotive sector saw an 1.4% q-o-q expansion, contributing 0.74 mnt in Q1FY'25. Meanwhile, industrial products and projects along with the branded products and retail sector registered a fall of 8.7% and 2.9% q-o-q respectively, totalling 1.66 mnt and 1.79 mnt respectively.
EBITDA decreases q-o-q: The earnings before interest, tax, depreciation, and amortisation (EBITDA) of the company showed a q-o-q fall of 15.2%, reaching INR 7,029 crore in Q1FY'25, compared to INR 8,285 crore in the previous quarter. Additionally, on a y-o-y basis, EBITDA experienced a marginal decline of 8% from INR 7,613 crore in Q1FY'24.
Raw material prices remain flat: Raw material prices were range-bound during the quarter. Coking coal was mostly between $250-260/t while iron ore prices were close to $110/t level. For Q2FY'25 it is expected that coal prices will fall by $15/t.
Note: All Figures are mentioned in for India (India includes Tata Steel Standalone and Neelachal Ispat Nigam Limited)