Tata Steel reports net profit of Rs 522.14 crore in the October-December quarter

Tata Steel reported a consolidated net profit of Rs 522.14 crore in the October-December quarter, marking a significant turnaround from a net loss of Rs 2,501.95 crore in the same period the previous year. The company attributed this positive performance to robust domestic demand, offsetting weakness in Europe.

The consolidated revenue from operations for the company during the October-December quarter decreased by three percent to Rs 55,311.9 crore compared to Rs 57,083.56 crore in the year-ago period. On a sequential basis, the consolidated revenue from operations declined by 0.7 percent from Rs 55,681.93 crore in the previous quarter.

The company's capital expenditure for the quarter amounted to Rs 4,715 crores, with a cumulative spending of Rs 13,357 crores between April and December. Tata Steel's net debt stands at Rs 77,405 crores, while the group liquidity remains strong at Rs 23,349 crores, including cash and cash equivalents of Rs 10,825 crores.

The positive performance was driven by strong demand in India, where the company reported revenues of Rs 35,011 crores, remaining broadly stable on a quarter-on-quarter basis. Crude steel production in Tata Steel's India unit reached 5.35 million tonnes, up six percent both quarter-on-quarter and year-on-year. The company achieved its 'best-ever 3Q' sales in India, with domestic deliveries reaching 4.88 million tonnes.

However, the European operations of Tata Steel faced challenges, with revenue from Europe operations falling 12.5 percent to Rs 18,141.97 crore in the quarter. The UK business experienced production shortfalls, and the company announced the phased shutdown of two blast furnaces in its Port Talbot Steelworks in Wales, potentially impacting up to 2,800 jobs.

Tata Steel's CEO, T.V. Narendran, highlighted the global operating complexities, citing economic slowdown in China and geopolitical factors impacting commodity prices. The company also faced challenges from increased steel exports by China, reaching 7 to 8 million tons per month, the highest since 2015, adversely affecting global steel prices and profitability.

Despite challenges, Tata Steel remains optimistic about the steel sector in India, projecting double-digit growth of 11-13 percent for the current fiscal year, according to Crisil's predictions. The company continues to focus on strategic investments and restructuring efforts, committing funds to support affected employees in its UK business as it aligns with green goals.