On greater volumes, Tata Steel expects a 33-38 percent increase in net profit in the fourth quarter.

  • May 3, 2022, 2:09 p.m.

Tata Steel is likely to report a strong set of numbers on Tuesday when the company announces its March quarter earnings, according to analysts, thanks to higher volumes.

Analysts tracking the firm expect revenues to increase 33-38 per cent year-on-year (YoY), while net profit is likely to jump 34-45 per cent. Earnings before interest, taxes, depreciation, and amortization (EBITDA) will likely rise by 12 to 13 percent, they said.

Below is a detailed commentary on analyst expectations:

Centrum Broking

For the standalone business, the brokerage estimates blended realisation to decrease by Rs 2,800/t QoQ to Rs 71,608/t. Coking coal costs are also expected to increase by $50/t QoQ and sales volume to increase by 17 percent QoQ at 4.96 mt.

We expect EBITDA/t to decrease by 15 percent QoQ to Rs. 24,280/t. Despite lower EBITDA/t, we expect EBITDA to be flat QoQ at Rs 12,000 crore owing to higher volumes. The European business is likely to record an EBITDA/t of $197, supported by higher volumes, steel prices, and flat COP. Overall, we expect Tata Steel's consolidated EBITDA to be flat QoQ at Rs 16,100 crore.

Axis Securities

Revenues to grow due to higher steel prices and steel deliveries. Tata Steel has released provisional production and deliveries. Group Steel deliveries are higher at 13 per cent QoQ and 4 per cent YoY.

  • EBITDA is expected to marginally increase as the impact of higher raw material costs (coking coal) is offset by higher steel prices
  • Margin pressure due to higher coking coal prices
  • PAT and EPS to broadly follow EBITDA growth

Author : Rajdhani Delhi Representative

Rajdhani delhi representative

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