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Business News/ Markets / Stock Markets/  Tata steel results Today: Here's what analysts expect, from financials to key monitorable
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Tata steel results Today: Here's what analysts expect, from financials to key monitorable

Stock Market Today: Tata Steel share price having risen more than 60% in a year. is trading near 52-week highs it scaled a few days back. The company while is expected to see good volume growth, profitability for domestic operations may decline sequentially. Here's more from what analysts expect -

Tata steel results Today: Here's what analysts expectPremium
Tata steel results Today: Here's what analysts expect

Stock Market Today: Tata Steel share price having risen more than 60% in the year is also trading near 52 week high of 177.70  , it scaled on 27 May. The investor confidence on Tata Steel Share Price remains high looking at strong domestic demand and rising commodity prices, with China demand also expected to rebound. The Tata Steel Share Price however remains in spotlight ahead of Q4 results today. Tata Steel share price was trading 0.5% lower at 174.05 on a day when benchmark indices also was down more than 0.6%.

Tata Steel performance in the quarter ending March 2024 is expected to see the impact of soft domestic steel prices, even as volume growth stays strong. The rising coal prices and iron-ore price is also likely to have some bearing on the operating performance and more on the European operations

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Strong Volume growth

Tata Steel domestic sales volume as per the provisional data released by the  company, at 5.41 million tonne (mt) at standalone level are likely to grow more than 5% over 5.15 mt in the year ago quarter and 10% sequentially. Domestic Steel production at 5.38 mt also improved well over 5.15 mt in the year-ago quarter and 5.35 mt sequentially.

Tata Steel Europe for its Netherland operations has seen sales volume at 1.40 mt improving over 1.3mt in the previous quarter, though is lower than 1.48 mt in the year ago quarter. Tata Steel UK sales volume at 0.69 mt, also are likely to improve slightly from 0.64mt in the December quarter and 0.76mt in the year ago quarter.

Lower steel prices to limit revenue growth

The steel price in the country however decline 4-5% sequentially for flat and long steel products as per analysts. Analysts at Kotak Institutional Equities say that they expect standalone steel realizations to decrease by 3% sequentially ( up 0.2% year-on-year) led by lower domestic prices during the quarter.

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Kotak analysts expect Tata Steel standalone revenues to decline 6.1% sequentially though rise 6.9% year-on-year.

Analysts at Phillip Capital also estimate  Tata Steel standalone revenues at 37,281 crore to rise only  7.5% sequentially despite almost 11% rise in sale volume sequentially. On year on year basis revenue may rise 8.8%. 

Profitability may decline

The Earnings before interest tax depreciation and amortisation at 7601.2 crore as per PhillipCapital estimates is expected to decline 7.9% sequentially and 6.5% year-on- year for the domestic operations.

The Ebitda per tonne thereby as per PhillipCapital estimates is expected to decline 16.9% sequentially and 13% year-on year to 14,050. Analysts at Kotak also expect India Ebitda per ton to decrease by 15% sequentially (15% yoy) to 14,319 mainly led by lower realizations, partially offset by operating leverage.

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The coking coal costs is expected to rise by $ 15-25 a tonne sequentially as per PhillipCapital estimates , whereas the iron ore prices have increased by 400-450 a tonne.

European losses to decline

Tata Steel Europe revenues at $2,532 million as per PhillipCapital estimates are likely to rise 16% sequentially though still down 5.5% yoy. Ebitda loss at $182 million is expected to almost half from $335 million in the previous quarter and $ 200 million in the year ago quarter as per their estimates.

Key monitorable

Management commentary on European operations is critical a per analysts

Also analysts will be watchful on the Management guidance on annual Selling price and Cost of Production across geographies.

Capex timeline will also be a key monitorable.

In addition analyst await an update on the Blast Furnace status in the Netherlands

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions

 

 

 

 

 

 

 

 

 

 

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ABOUT THE AUTHOR
Ujjval Jauhari
Ujjval Jauhari is a deputy editor at Mint, with over a decade of experience in newspapers and digital news platforms. He is skilled in storytelling, reporting, analysing and writing about stocks, investment ideas, markets, corporates and more. He is based in New Delhi.
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Published: 29 May 2024, 01:05 PM IST
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