Tata Steel Q4 result preview: Profit after tax likely to fall 97.1%, margins may decline to 9.1%

Tata Steel, the steel company of Tata Group is likely to report a 97.1 per cent fall in profit after tax (PAT) to Rs 288 crore for the quarter that ended on March 31 compared with the corresponding period a year ago, according to Zee Business Research.

The steelmaker’s revenue is expected to decline by 14.3 per cent to Rs 59,418 crore compared with the year-ago period. The company is likely to report India's business earnings before interest, taxes, depreciation, and amortisation (EBITDA) per ton at Rs 13,107 crore against Rs 11,241 crore in the previous quarter. On a year-on-year (YoY) basis, India's business' EBITDA may decline 46.8 per cent.

The company's margin — a key measure of profitability for a business — is likely to slump by 1,290 basis points to 9.1 per cent, with the Europe EBITDA per tonne estimated at $74 from $241 a year ago, according to Zee Business research.

The March quarter business update showed that sales grew 6 per cent QoQ. While the cost of Hot Roll Coil (HRC) declined by 12 per cent YoY, the cost rose 5 per cent QoQ.

According to the Zee Business report, the company will benefit from the price decline in coking coal – an essential input for the production of iron and steel.

At the time of filing this report, shares of Tata Steel were trading nearly 1 per cent on the upside on NSE and quoted Rs 107.75 apiece. On BSE the stock traded at Rs 107.7 apiece. Tata Steel shares declined nearly 10 per cent in value in the past six months, a period in which headline indices Sensex and Nifty50 rose 0.75 per cent each.

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