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Tata Steel posts Rs 1,665-crore net profit; here're key points

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Tata Steel on Friday said its consolidated net profit declined about 50 per cent to Rs 1,665.07 crore in the September 2020 quarter. The company had clocked a net profit of Rs 3,302.31 in the corresponding quarter of the previous financial year, Tata Steel said in a BSE filing.

Tata Steel has reported a consolidated net profit decline of  about 50 per cent to Rs 1,665.07 crore in the September 2020 quarter. In the corresponding quarter of the previous financial year, the company had clocked a net profit of Rs 3,302.31.
Its total income stood at Rs 37,376.13 crore, against Rs 34,762.73 crore in the year-ago period. The firm's total expenses were at Rs 35,244.58 crore, against Rs 34,758.15 crore a year ago, , Tata Steel said in a BSE filing.
The company has initiated discussions with Sweden-based SSAB on potential sale of Tata Steel Netherland business, including Ijmuiden steelworks, it said in a statement.
Tata Steel has also initiated the process to separate Tata Steel Netherlands and Tata Steel UK and will pursue separate strategic paths for the Netherlands and the UK businesses in the future.
"Tata Steel has delivered strong results in India with broad-based, market leading volume growth and strong cashflow generation," said T V Narendran, Tata Steel CEO and MD.
He added that the resilience of the firm's business model and the commitment of its teams have enabled it to ramp up capacity utilisation to normal levels and achieve highest-ever sales, despite the ongoing challenges due to the COVID pandemic.
On the business in Europe, he said though the overall environment remains challenging and recovery is more gradual, there has been an improvement in volumes and sales.
The company is in discussions with the UK government regarding the future strategy of its UK business, he said.
Tata Steel Executive Director and CFO Koushik Chatterjee said despite the pandemic, the company has delivered one of the best quarterly results in India in recent times.
"This was driven by relentless focus on operating performance and a reduction in our cash costs by almost 14 per cent on a quarter on quarter basis."
India operations, he said, generated an Ebitda (earnings before interest, tax, depreciation and amortisation) of Rs 6,025 crore during July-September 2020.
The Ebitda during the same quarter of the previous financial year was at Rs 4,033 crore, according to company data.
In India, Tata Steel is moving on the consolidation and the corporate simplification process, with the announcement today (Friday) of the merger of Tata Metaliks and Indian Steel and Wire products into Tata Steel Long Products, he said.
Results of  Tata Steel: Some important points
CMP Rs 487; MCap Rs 55748 crore
Results analysis
* Results are super
* Deleveraging also on
* Deals in the works
Consolidated numbers very good
* Margins at 16.45% vs Poll of 11.6%
Both the key data points rocking
* India EBITDA/tn at 13,127/tn vs expected 12300/tn
* Europe EBITDA/tn at -27$/tn vs expected -40$/tn
Deleveraging in the works
* Net debt -8285 cr in 1HFY21
* Net debt is at Rs.96,495 cr
Deals in the works
* To separate Tata Steel Netherlands and Tata Steel UK
* Talks with SSAB Sweden for sale of Netherland unit
* To pursue strategic paths for Netherlands and UK business
* Continue dialogue with UK govt on potential measures
* Process to separate Netherlands, UK operations  initiated
Domestic consolidation:
* Tata Metaliks to merge self with Tata Steel products
- With PTI inputs