Tata Steel share price closes with 1% gains a day after Q2 results

Tata Steel share price opened flat on Thursday's trading session after the company reported a net loss of ₹6,196.24 crore for the quarter ended September. The steel makers, total revenue from operations also dropped by 7% year-on-year (YoY) to ₹55,681.93 crore for Q2FY24. Tata Steel share price today opened at ₹114.25 apiece on the BSE today.

According to Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One, Tata Steel stock prices have seen a gap down opening however post that they are not seeing any major traction. Stock prices are currently hovering around August swing low around 114 and would be crucial to defend the same levels on closing basis. On the flip side 120 is resistance. A closing bellow 114 can trigger further weakness in near term toward 108.

“The stock has already corrected ahead of the results. The momentum readings are oversold and hence we could see some bounce, but it needs to surpass the resistance of 123 for any sustained upmove,” said Ruchit Jain, Lead Research Analyst at 5paisa. 

On Thursday, Tata Steel shares closed 1.33% higher at ₹118.15 apiece.

The street was expecting that the Tata Group company would post a sharp drop in earnings for the FY24 quarter ending in July–September. In fact, because of lower average selling prices (ASP) brought on by lower ferrous prices, as well as less seasonal demand, the whole steel industry is predicted to record mixed results in Q2FY24. Analysts noted that cheaper coking coal prices will, however, somewhat offset this decrease.

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The steel maker had reported a consolidated net profit of ₹633.95 crore in the September quarter of FY23. Its total revenue from operations declined by 7% YoY to ₹55,681.93 crore in September quarter of FY24, against ₹59,877.52 crore in the September quarter of FY23.

For the quarter ended September, the company reported an earnings before interest, taxes, depreciation, and amortisation (EBITDA) of ₹4,315 crore, while margins were at ₹8%, as per the company's release. 

Also Read: Tata Steel Q2 results: Company reports net loss of ₹6,196 crore

For the quarter, the company spent ₹4,553 crores on capital expenditures, and for the half-year, it spent ₹8,642 crores. The 0.75 MTPA EAF project in Punjab and the 5 MTPA extension at Kalinganagar are now being implemented.

“Tata Steel Consolidated revenues for the quarter stood at ₹55,682 crores and consolidated EBITDA stood at ₹4,315 crores, which translates to an EBITDA margin of 8%. India business generated higher margin of around 20% and EBITDA stood at ₹6,841 crores. In Europe, margins moderated especially in UK business while Netherlands business was broadly stable on QoQ basis. Revenue per ton was lower in both geographies. However, improved costs in Netherlands led to broadly similar margins. 

Cash flow from operations before interest stood at ₹4,658 crores driven by favourable working capital movement. Our capital expenditure was ₹4,553 crores during the quarter and ₹8,642 crores for the half year. This is broadly in line with our annual guidance of about ₹16,000 crores for FY2024 and we continue to prioritise completion of the 5 MTPA Kalinganagar expansion," said Koushik Chatterjee, Executive Director and Chief Financial Office in a release. 

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