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    Tata Steel Q1 net profit falls 20.5% but beats estimates

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    Tata Steel Q1 net profit falls 20.5% but beats estimates

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    Shares of Tata Steel ended at Rs 960.90, up by Rs 24.90, or 2.66 percent on the BSE.

    Mumbai-based Tata Steel on July 25 reported a 20.5 percent year-on-year (YoY) decline in consolidated net profit at Rs 7,765 crore for the first quarter ended June 30, 2022, on higher expenses.
    In the corresponding quarter last year, the company posted a net profit of Rs 9,768 crore. CNBC-TV18 Polls had predicted a profit of Rs 7,046 crore for the quarter under review.
    Despite the sharp rise in input costs especially coking coal and gas prices in Europe, total income stood at Rs 63,430.07 crore during the period under review, up 18.8 percent against Rs 53,371 crore in the corresponding period of the preceding fiscal.
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    At the operating level, EBITDA declined 7.1 percent to Rs 14,972.8 crore in Q1 FY23 over Rs 16,109 crore in Q1 FY22. EBITDA margin stood at 23.6 percent in Q1 FY23 as compared to 30.2 percent in Q1 FY22. EBITDA is earnings before interest, tax, depreciation and amortization.
    The consolidated EBITDA stood at Rs 15,047 crore. On a QoQ basis, EBITDA margin improved to 24 percent while EBITDA per tonne increased by Rs 3,780 to Rs 22,717. The company's net debt stood at Rs.54,504 crore. The net debt to EBITDA at 0.87x and the net debt to equity at 0.48x.
    Coming to deliveries, it was marginally lower by 2 percent YoY due to moderation in exports following the imposition of a 15 percent export duty. Consequently, domestic deliveries were successfully ramped up by leveraging our strong marketing network and agile business model.
    T V Narendran, chief executive officer and managing director said the first quarter has been a challenging quarter for the global and Indian economy with rising interest rates, supply chain constraints and the slowdown in China due to COVID.
    "Despite these multiple headwinds, Tata Steel has delivered a strong performance with an improvement in margins. Our strong marketing franchise and superior business model in India enabled us to successfully pivot and increase our domestic deliveries to counter the 15% duty imposed on steel exports in the middle of the quarter," he said.
    The CEO said the company is commissioning the 6 MTPA pellet plant at Kalinganagar in 3QFY23 which will drive cost savings followed by the CRM complex and the 5 MTPA expansion project. Also, Tata Steel Long Products has completed the strategic acquisition of Neelachal Ispat Nigam Ltd and will drive the growth of our products business, he added.
    Koushik Chatterjee, executive director, and the chief financial officer said Tata Steel continues to deliver operationally and financially despite the complex operating environment, sudden impact of regulatory changes, and the heightened volatility in commodity prices.
    "Our consolidated revenues for the quarter stood at Rs 63,430 crore and our consolidated EBITDA stood at Rs 15,047 crore. Our EBITDA margin increased QoQ from 22 percent to 24 percent and EBITDA per tonne increased from Rs 18,937 to Rs 22,717.
    Consolidated PAT for the quarter stood at Rs 7,714 crore. In India, standalone revenue stood at Rs 32,021 crore and EBITDA was Rs 9,616 crore. In Europe, we achieved the highest ever quarterly EBITDA of £621 million, which translates to an EBITDA per ton of £290," he said.
    The results came after the close of the market hours.
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