Tata Steel Q2 Results Preview: Net profit likely to fall 80%, margin may shrink by 170 bps

Tata Steel quaterly results, Tata Steel Q2 results 2023 expectations: Tata group steelmaker Tata Steel is all set to report its financial results for the July-September period today, November 1. The alloy-making giant is widely expected to stage a weak financial performance for the three-month period owing to the impact of monsoon rains on its delivery volumes. Tata Steel shares edged lower to trade 0.42 per cent lower at Rs 118.25 on NSE in morning deals. 

According to Zee Business research, Tata Steel is likely to report a consolidated net profit of Rs 304 crore for the July-September period, translating into a 79.9 per cent fall compared with the corresponding quarter a year ago. The analysts estimate the steel manufacturer’s revenue for the fiscal second quarter to fall 6.7 per cent on a year-on-year basis to Rs  55,869 crore.  

The steelmaker is estimated to register Rs 4,654 crore in earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the three-month period, as against Rs 6,060 crore for the year-ago quarter, according to the research.  

Zee Business analysts peg the steelmaker's margin—a key measure of profitability—at 8.3 per cent for the quarter ended September 2023, from 10 per cent three months ago. 

How Tata Steel fared in the June quarter?

Tata Steel staged a mixed performance for the first three months of the financial year. Its net profit stood at Rs 634 crore while revenue came in at Rs 59,490 crore for the quarter ended June 2023 amid lower volumes, according to a regulatory filing. 

For the corresponding period a year ago, its net profit had stood at Rs 7,765 crore and revenue at Rs 63,430 crore. The alloy maker’s margin for the three-month period came in at 8.7 per cent. Zee Business analysts had pegged the company’s profit at Rs 850 crore, revenue at Rs 59,400 crore and margin at 8.3 per cent for the April-June period.  

Tata Steel shares: Past performance 

As of October 31, 2023, Tata Steel shares have grown more than 17 per cent in value in the past year, sharply outperforming a five per cent rise in the headline Nifty50 index. The steel stock finished the September quarter 15.2 per cent stronger while the blue-chip gauge gained 2.4 per cent.  

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