Tata Steel Q4: Profit rises 37% to Rs 9,835 crore, 10:1 Stock Split announced

Profit increased: Tata Steel has reported a robust rise in net profit in Jan-Mar 22 period, driven by higher other income even as cost inflation weighed on its margin. The company's net profit increased by 37.3% to Rs 9,835.12 crore, beating analyst estimates. Analysts had earlier estimated a profit of about Rs 9,462 crore. The company had reported a profit of about Rs 7,162 crore in the same period last year. Sequentially, the profit increased 2.5% from Rs 9,598 crore.

Revenue rises: Revenue rose to Rs 69,323 crore, up 39% on-year. Analysts had expected a profit of about Rs 66,195 crore. Sequentially, the revenue was up by 14.1%. Revenues were broadly stable as improvement in net realizations more than offset the drop in volumes. Tata Steel India reported a 34% growth YoY at Rs 36,681 crore and Tata Steel Europe clocked a massive 53% growth at Rs 26,389 crore in the same period.

Operating profits and margins: Due to the surge in international coal prices and the inflationary impact of various commodities, the operating profit declined 4.3% sequentially to Rs 15,174 crore against analyst estimate of Rs 15,774 crore. YoY, it is 6% higher. 

The EBITDA margins came down by 420 basis points at 21.9% compared to 26.1% in the previous quarter. It reported the highest ever consolidated EBITDA of Rs 63,830 crore with an EBITDA per ton of Rs 21,626. Profit after tax stood at Rs 41,749 crore.

Debt reduction: Gross debt stood at Rs 75,561 crore with net repayments of Rs 15,232 crore. Net debt declined to Rs 51,049 crore. Net debt to EBITDA improved to 0.80x and net debt to equity improved to 0.52x.

India business doing well: The Indian business achieved the highest ever annual crude steel production of 19.06 million tons, with a growth of 13% YoY. It reported the highest ever deliveries of 18.27 mn tons despite COVID 2nd wave related disruption early in a financial year. EBITDA stood at Rs 52,745 crore, which translates to an EBITDA per ton of Rs 28,863.

Update from Europe business: For Q4FY22, the revenue increased 54% YoY and stood at £8,876. The EBITDA in the March quarter came at £1199 million.

Dividend and stock split: The Board of Directors recommends a dividend of Rs 51 per fully paid equity share and Rs 12.75 per partly paid equity share. A 10:1 stock split is also recommended.

The share was trading 0.8% lower on Wednesday afternoon at Rs 1285 per share.