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Tata Steel today reported a consolidated net profit of 11,918 crore for the second quarter ending September 30, 2021 (Q2FY22). This is an increase of 661% from 1,565 crore in the corresponding quarter of last year.

The steel major's revenue from operations rose 55% to 60,282 crore for the period under review as compared to 38,939 crore in the year-ago period.

On Thursday, ahead of the results, Tata Steel shares closed flat to settle at 1,299 apiece on NSE. Since the start of 2021, the scrip has gained by 102.15% (year-to-date) and surged 174.75% in the last one year.

“Tata Steel has delivered strong results across key geographies in this seasonally weaker quarter. Our steel deliveries in India expanded by 11% despite a contraction in market demand which is a testament to the strength of our franchise. We continue to drive value accretive growth in our chosen segments and our performance in key segments such as auto was very robust despite the sector being impacted by the semiconductor shortage," said T V Narendran, CEO and MD of Tata Steel.

The company's consolidated adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) increased 12% over previous June quarter to 17,810 crore.

The Board has also approved the issuance of one fully paid-up equity share of Tata Steel of face value 10 each for every 15 equity shares of Tata Steel BSL of face value 2.

When it came to India operations, crude steel production increased by 3% year-on-year to 4.73 million tonnes during the second quarter, while overall deliveries surged 11% QoQ to 4.58 million tonnes despite market demand contraction amidst seasonal weakness.

Quarterly adjusted EBITDA for the India business stood at 13,877 crore with 2.3x year-on-year growth.

Revenues at Tata Steel Europe business went up 50% year-on-year to £2,108 million in the reporting quarter, while EBITDA improved 2.2x QoQ to £328 million which translates to an EBITDA per ton of £153.

"The operating cash flows continue to be strong despite working capital pressure due to price effect on coal price increase in recent months. We signed and closed the divestment of our 100% holding in NatSteel Holdings in this quarter to realise around 1,200 crore that resulted in a realised gain of 720 crore for the quarter," said Koushik Chatterjee, Executive Director and CFO of Tata Steel.

"As part of our enterprise strategy, we continue to deploy the free cash flows for de-leveraging the balance sheet with 11,424 crore of debt repayment in the first half of the current financial year and are targeting additional, aggressive deleveraging in the second half as well," Chatterjee further said.

Tata Steel is among the top global steel companies with an annual steel production capacity of 34 million tonnes per annum.

Other operational highlights of Tata Steel's Q2 performance

- Consolidated free cash flow was 3,322 crore during 2QFY22 despite an increase in working capital of 3,889 crore and dividend payment of 3,020 crore.

- The company spent 2,191 crore on capex during the quarter, work on the Pellet plant, the Cold Roll Mill complex and the 5 MTPA expansion at Kalinganagar is ongoing.

- Gross debt, meanwhile, decreased to 78,163 crore with repayments of 11,424 crores made during the first half, and net debt declined to 68,860 crore.

- Net debt to EBITDA improved to 1.21x, while net debt to equity improved to 0.79x.

- Tata Steel Standalone business registered highest ever quarterly adjusted EBITDA at 13,574 crore in the second quarter with 2.3x YoY growth.

- Tata Steel Long Products registered quarterly EBITDA of 302 crore.

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