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Tata Steel’s share price dips by 0.39 per cent as Q1FY24 net profit takes a steep plunge due to lower production amid planned shutdowns in Europe, facing a 6 per cent revenue growth decline.
The revenue declined by 6 per cent to ₹59,490 crores (from ₹63,430 crores), while expenses rose to ₹58,553 crores (from ₹51,912 crores). The business faced challenges from elevated input costs, precisely the high price of coking coal and lower volume in Europe, which impacted the margin profile.
Shreyansh Shah, a Research Analyst at Stoxbox, has expressed concerns over Tata Steel’s future prospects amidst the prevailing high-interest rate environment. According to Shah’s views, the company may face continued headwinds on the global economic front, leading to potential challenges in the offtake of steel and resulting in subdued price realizations going forward.
Adding to the uncertainties, Tata Steel’s Port Talbot plant in the UK is under close observation as its fate relies on the level of support from the UK government. The final decision, expected to be reached within the next few months, holds the potential to impact the trajectory of the company significantly.
The shares went down by 0.39 per cent to ₹115 at 09:32 a.m. on BSE.
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