Tata Steel Q2 Results Review - Earnings Below Estimates; Margin Pressure Likely To Ease In H2: Systematix

Systematix Research Report

Tata Steel Ltd.’s Q2 FY23 consolidated adjusted Ebitda of Rs 58 billion (down 67% YoY, down 59% QoQ) came 36% below our estimate, primarily due to moderate realisation, dilution of high-cost inventory, and full impact of export duty implementation.

Standalone India operations posted Ebitda of Rs 50.6 billion (down 63% YoY, down 47% QoQ), while that of the Europe operations stood at Rs 17.8 billion (down 46% YoY and down 70% QoQ).

Sales volumes at standalone India operations was 4.9 million tonne (up 7% YoY, up 21% QoQ) and consolidated at 7.2 million tonne (up 3% YoY, up 11% QoQ).

Tata Steel's higher volumes were offset by 22.5% YoY and 11.1% QoQ increase in costs, and lower India realisation (down 7% YoY and down 17% QoQ), which negatively impacted earnings during the quarter.

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