BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
We believe Tata Steel Ltd.'s standalone’s H1 FY23 Ebitda is likely to contract by 66% over H1 FY22 driven by lower average selling price, lower demand and peak coking coal costs and high base effect.
India operations will not benefit from lower iron ore costs or discounted Russian coal. Hence, the cost structure will only benefit from the reduction in coking coal prices that too for 70-75% of requirement as India operations are captive on coking coal for the balance.
We cut our FY23E consolidated Ebitda by 22%, driven by 34% reduction in standalone Ebitda, partially offset by 4% increase in Tata Steel Europe Ebitda.
The reduction in domestic Ebitda is driven by:
lower than expected sales volume,
reduction in average selling price and
higher than estimated coking coal cost.
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