Tata Steel jumps to year high; delivers strong Q2 show
Shares of Tata Steel jumped more than 7% to Rs 529 apiece on NSE – a fresh 52-week high – after reporting strong set of numbers on operational front for the quarter ended September 2020(Q2FY21). The stock of the Tata Group company surpassed its previous high of Rs 505.95, touched on January 14, 2020.
The Tata Group owned integrated steel maker delivered strong results in India with broad-based, market-leading volume growth, and strong cash flow generation in Q2FY21. The company’s Ebitda (earnings before interest, taxes, depreciation, and amortisation) from India operations surged 4.1 times quarter-on-quarter (QoQ) and 49% year-on-year (YoY) to Rs 6,025 crore, driven by higher volumes, improved realisations, and cost efficiencies.
In Q2FY21, the company’s consolidated Ebitda surged 10.4 times QoQ and 60% YoY to Rs 6,217 crore while consolidated profit after tax from continuing operations increased by 136% QoQ to Rs 1,635 crore.
The free cash flow generated during the quarter was Rs 7,832 crore. The company said it is committed to deleveraging of $1billion annually and has reduced net debt by Rs 8,197 crore during the quarter.
However, on a year-on-year (YoY) basis, consolidated net profit was down 50% as tax expenses ate into the profits even as sales were up. Net sales of the company stood at Rs 36,476 crore in the period under review, up 7.4% from the same period last year due to higher volumes, improved realisations, and cost efficiencies. The tax expense of Rs 613 crore in the September quarter hurt the company’s bottomline in the period under review.
Tata Steel achieved the best-ever quarterly volumes in India, registering growth both on QoQ and YoY basis.
“Net debt reduced by Rs 8,285 crore in H1FY21; now below March 2019 levels.
The merger of Tata Metaliks and Indian Steel & Wire Products into Tata Steel Long Products is approved.
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