Tata Steel Q2 net profit climbs 18% on stronger realisation

what happened

Tata Steel reported that net profit attributable to owners in the September quarter rose 18%, to ₹3,660 crore from ₹3,102 crore a year earlier. The company credited the gain to better realisation. Revenue grew 12%, to ₹64,974 crore, while EBITDA rose to ₹10,665 crore from ₹9,106 crore and EBITDA per tonne climbed to ₹13,462 from ₹11,518.

Gross debt increased to ₹1.02 lakh crore from ₹97,985 crore in the June quarter, leaving net debt at ₹91,423 crore. Capital expenditure was about ₹3,280 crore in the quarter and ₹6,860 crore in the first half of the fiscal year. Major projects include a 4.8 MTPA capacity expansion at Neelachal Ispat Nigam. In the Netherlands, EBITDA rose from €4 million to €72 million after the Direct Sheet Plant restarted, while the UK remained weighed down by subdued demand, elevated imports and high inventories. Noel Naval Tata will retire as Vice Chairman and non-executive director on November 11.

why it matters

The profit gain rests largely on pricing, which matters for steel investors because weak UK demand and excess imports in Europe leave some regions exposed. Leverage remains high, so the timing of the NINL amalgamation, which the company says is on track to finish this fiscal year subject to NCLT approval, will also be watched closely.

market impact

Tata Steel shares: higher profit and realisation prices support the stock

• ▲Tata Steel shares pressure up — higher profit and better realisation support investor interest

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