Higher production and one-time income from disinvestment helped Tata Steel report a consolidated net profit of ₹921 crore in the June quarter against a net loss of ₹3,183 crore in the same period last year.
Sales were up 19 per cent at ₹30,803 crore (₹25,897 crore in the year-ago period). The company has made a provision of ₹617 crore due to the ongoing mining-related litigation, said the company in a statement on Monday.
Last week, the Supreme Court levied penalty on a group of steel companies, including Tata Steel, for extracting iron ore and manganese ore in Odisha in excess of prescribed limits between FY2000 and FY2010. In view of the judgment, the provision has been made in the quarter, said Tata Steel.
Gross debt increased by ₹4,798 crore to ₹87,812 crore on the back of cost involved in managing the inventory build-up in India due to GST implementation and lack of demand in Europe. Net debt was at ₹71,703 crore due to build up in cash reserve to fund £550 million British Steel Pension Scheme settlement which is expected to be announced soon.
Tata Motors stake sale Tata Steel sold its stake in Tata Motors for ₹3,778 crore during the quarter and realised over ₹14,266 crore through disinvestment in the last five years. The company’s steel production in India was up 28 per cent at 2.75 million tonnes due to ramp up at Kalinganagar facility but declined 14 per cent on sequential basis due to GST and planned shutdown.
Ebitda from Indian operations was up 31 per cent at ₹2,922 crore (₹2,236 crore), while consolidated Ebita increased 50 per cent at ₹4,939 crore.
TV Narendran, Managing Director, Tata Steel said there was inventory destocking across the channel in the run-up to the GST implementation which led to a drop in volumes on sequential basis.
“We expect a drop in interest rate and lower inflation to trigger consumption cycle which will help our retail business and overall steel demand. However, the appreciating Rupee remains a cause for concern,” he said.