Mumbai: Tata Steel’s net profit for the quarter ending in March fell by 65% to ₹555 crore because of lower steel prices in India. The company’s total revenue for the quarter decreased by about 7% to ₹58,678 crore, and its EBITDA (earnings before interest, tax, depreciation, and amortization) dropped by over 8% to ₹6,631 crore.
India, which is Tata Steel’s main market and accounts for nearly 70% of its volume, saw a slight decline in sales and operating profit. The company’s operating profit per tonne of steel sold in India was ₹15,237 in the fourth quarter, down from ₹16,488 per tonne last year. Sales in India were ₹36,864 crore, a 4.5% decrease from the previous year.
For the entire 2023-24 fiscal year, Tata Steel saw a small increase in sales in India, with sales volumes and production reaching record highs. CEO T V Narendran said, “In India, which is a structurally attractive market, we have delivered improved margins and continued to expand our footprint in terms of volumes as well as product portfolio.”
Future Plans
Tata Steel is increasing its capacity by 5 million tonnes at its Kalinganagar plant and spent ₹18,207 crore on capital expenditure during FY24. Its operating margins in India improved by 200 basis points to 22% for the year. Narendran noted, “FY24 has been a year of progress for Tata Steel with transition towards stated goals in India and abroad despite the challenging operating environment.”
In the UK, Tata Steel decided to shut down some major assets and set up an electric arc furnace by 2027. Both Tata Steel UK and Tata Steel Netherlands had operational losses in Q4, but the losses were smaller than the previous year.
The company plans to raise ₹3,000 crore through non-convertible debentures on a private placement basis. The board also approved investing up to $2.11 billion in its subsidiary T Steel Holdings Pte in the current fiscal year through multiple tranches and converting $565 million of debt into equity shares during the year.
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