Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Tata steel announced its results on Thursday for the quarter ended in June (Q1 FY2022). Domestic steel prices are still at a discount of 20pc against equivalent import prices from the overseas markets. International steel prices remain robust in the US and European countries. Also, the cost of raw materials has moved up, said the steelmaker in its earnings concall.


Production was affected due to the second wave of COVID, post which supported by Indian government policies, steel demand is constantly improving boosting the outlook for the coming quarters.


The company aims to add 1mn mt of production in India in FY2022. Before the first half of 2022 ends, 6mn mt per annum capacity pellet and cold rolling mills complex are to be commissioned. Also, the 5mn mt per annum capacity expansion project at Kalinganagar is under progress in Phase 2.


The company expects Indian realisation in Q2FY2022 to be higher byRs3,000/mt on higher export prices. The company targets auto contracts at higher prices in the coming days. Also, steel exports are likely to stay above 20pc of total output.


Driven by higher steel prices, the company reported its highest-ever EBITDA in the Q1 FY2022. (Apr-June). EBITDA jumped 25.7 folds from the prior year to Rs161,850mn ($2448mn). Net sales more than doubled to Rs533,720mn ($7,186mn) from the prior year. Steel deliveries rose 33pc from the prior year to 7.11mn mt. However, in Q1, deliveries dropped by 9pc from Q4 FY2021 (Jan-Mar).


Net profits at Rs97,680mn ($1,318mn), driven by improved performance in the European business against the highest-ever consolidated net loss of Rs46,090mn in the corresponding quarter last year. Profits surged on low base effect.



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