Tata Steel reported a significant decline in consolidated net profit for the April-June quarter of FY 2023-24, with profits falling by over 93pct to INR 524.85 crores (USD 64 mln).
The company attributed the decline in profitability to higher expenses and a non-cash deferred tax charge related to the buy-in transaction at the British Steel Pension Scheme. However, Tata Steel emphasized that the insurance buy-in of BSPS was successfully completed, leading to the derisking of Tata Steel UK.
In the corresponding period of FY 2022-23, Tata Steel had posted a net profit of INR 7,714 crore. The company’s consolidated revenues for the quarter stood at INR 59,490 crores (USD 7.2 bln), compared to INR 63,430 crores in the same period last fiscal year.
Despite the challenges, Tata Steel saw a 2pct YoY increase in crude steel production, primarily driven by the ramp-up at Neelachal Ispat Nigam Limited. Steel sales rose by 18pct year-on-year to 4.8 mln tons, primarily due to higher domestic deliveries.
However, Tata Steel’s exports from Indian plants declined to 0.25 mln tons, down from 0.38 mln tons in the previous fiscal year’s Q1.
Commenting on the performance, Tata Steel CEO & MD T V Narendran acknowledged the headwinds faced by the global economic recovery, impacting commodity prices, including steel. In India, domestic steel demand continued to grow, increasing around 10pct YoY, but steel spot prices moderated in line with global trends.
Despite these challenges, Tata Steel delivered a steady performance, with India crude steel production reaching approximately 5 mln tons. Domestic deliveries witnessed a robust 20pct growth, outpacing India’s apparent steel consumption during the quarter.
1 USD / 81.8 INR
