📷 Image Credits: Moneycontrol
Tata Steel experienced a significant setback as its net profit plummeted by 64% in the fourth quarter, leading to a 4% decline in its share value. The steelmaker attributed this decrease to lower steel realisations and underperformance in its international operations. The company’s Q4 net profit stood at Rs 611.48 crore, a stark decline from the Rs 1,704.86 crore reported in the same period last year.
The consolidated revenue from operations also took a hit, dropping by 6.7% to Rs 58,687.3 crore during the January-March quarter compared to Rs 62,961.5 crore in the previous year. This decline in revenue resulted in Tata Steel’s stock price falling to Rs 167.85 on the NSE, marking a 3.7% decrease from the previous day’s closing price.
Despite the challenging financial results, Tata Steel saw some positive developments. Sales were driven by higher dispatches in domestic markets, increased volumes in auto grade and special grade steel, as well as higher sales in the branded and retail segment. Financial experts from Jefferies issued a buy recommendation with a target price of Rs 200 per share. They noted a sequential uptick in EBITDA at Rs 6,631 crore, which surpassed their earlier estimates.
Moreover, Tata Steel approved a proposal to inject funds up to $2.11 billion (Rs 17,407.50 crore) into its wholly-owned subsidiary T Steel Holdings (TSHP) Singapore. This move aims to repay debt and support the restructuring costs at Tata Steel UK, demonstrating the company’s commitment to financial stability.
Looking ahead, Tata Steel is making strategic investments to enhance its operational efficiency. The firm announced a significant £1.25-billion investment to build an electric arc furnace in Port Talbot, replacing two blast furnaces and preparing to phase out existing heavy end assets in the coming months. These initiatives are part of Tata Steel’s efforts to adapt to changing market dynamics and strengthen its position in the steel industry.
