Tata Steel Tubes registers 121% Y-o-Y growth in retail segment in Q2 FY21

The performance of Tata Steel Ltd. (Tubes Division) in Q1 FY21 was immensely impacted due to the imposition of stringent lockdown by the Indian government which led to a complete closure of the domestic markets in Apr '20 and for a good part of May '20. However, in Q2 FY21, gradual improvement in demand was witnessed with phased relaxations in lockdown. TSL leveraged their robust network and strong customer relationships and successfully delivered a significantly better Q-o-Q growth across all the three verticals which are mentioned below:

• Branded & Retail (B&R) - primarily caters to the IHBs (Individual House Builders)
  
  
• Construction Infrastructural Industrial & Projects (CIIP) - servicing large Infrastructure Projects (Like Airports, Metro Rails) & Construction
  
  
• BAGE - Boiler Automotive & General Engineering - catering to the two-wheelers and commercial vehicles auto industry and Boiler / Furniture segments
  
  

Tata Steel Tubes, led by its two pioneering brands Tata Structura (Structural segment) & Tata Pipe (Conveyance segment), the B&R vertical registered a strong growth on Y-o-Y basis. This performance was strongly supported by their ability to leverage their network in rural market and select districts, where the impact of lockdown was low, while the company continued their focused initiatives of brand building activities for dealers, consumers & influencers. TSL also increased their presence via Digital Platforms such as Aashiyana to further improve customer reach, serviceability and experience. The BAGE vertical also recorded Y-o-Y growth with their strong focus on Boiler Industry and General Engineering and recovery in automotive sector demand. Although the CIIP vertical remained weak on Y-o-Y basis due to weakness in construction activities and constrained labour availability. However, the demand is now recovering with progress on projects in Railways, Water Supply & Sanitation area.

Segmental Highlights

• Automotive & special products:
  
  

Launched digital value analysis & value engineering platform "e-DRIVE" enabling to engage with automotive customers for the workshops virtually - first in India

• Branded products and retail:
  
  

~ Aashiyana - an online platform by Tata Steel targeted towards 'Individual home builder' segment clocked a turnover of Rs.159 crores in Q2 FY21, registering a growth of 121% Y-o-Y

~ Tata Astrum recognized as India's Leading Brand for 2020 by 'The Brand Story'

~ Emerging Corporate Accounts (ECA) coated segment deliveries grew 22% Y-o-Y in H1 FY21

• Industrial products and projects:
  
  

~ Entry of 'Sm@rtFAB' (a prefabricated welded wire fabric solution) in two new segments - Metro Railway and Gas Pipeline

~Oil & Gas segment deliveries grew 9x Y-o-Y in H1 FY21

• Downstream divisions (Includes Tubes, Wires, Bearings, etc.) :
  
  

~ Tubes division achieved the highest ever quarterly deliveries with 133% Q-o-Q and 5% Y-o-Y; driven by strong performance in Retail and Automotive segments

~Wires division achieved delivery growth of 119% Q-o-Q and 6% Y-o-Y; driven by strong performance in Retail, Auto and Infrastructure segments

Outlook

Global steel demand is expected to improve gradually; full year decline in 2020 is expected to be lower than earlier estimates .Indian steel demand continues to improve, supported by government spending on infrastructure, festive season and higher rural consumption on the back of good monsoon.

Indian steel prices to remain supported by strong international prices, robust raw material prices, recovery in steel demand and tight supply situation. Re-imposition of lockdowns amid resurgence of COVID-19 infections is likely to pose a risk.