Tata Steel has reported that its consolidated net profit for the June quarter dipped to ₹7,714 crore, against the ₹9,768 crore logged in the same period last year, largely due to weak demand and higher costs.

Income from operations was up 19 per cent at ₹63,128 crore (₹53,142 crore). The 10:1 stock split, announced earlier, will come into effect from July 29, said the company.

Overall production cost increased 25 per cent to ₹51,912 crore (₹41,491 crore) as inventory increased to ₹8,099 crore (₹3,292 crore) and cost of raw material jumped to ₹26,320 crore (₹16,034 crore).

Sales volume dipped to 6.62 million tonne (7.11 mt), while production was at 7.74 mt (7.88 mt). Ebitda per tonne reduced to ₹22,661 (₹22,366) despite high margins in its European business.

On a standalone basis, the net profit was down 37 per cent at ₹5,783 crore (₹9,112 crore) even as income increased 16 per cent to ₹34,015 crore (₹29,377 crore). Ebitda per tonne plunged to ₹21,326 (₹32,712).

Gross debt of the company increased to ₹82,597 crore (₹75,561 crore). The net debt of the company was at ₹54,504 crore.

TV Narendran, Managing Director, Tata Steel, said it has been a challenging quarter for the economy with rising interest rates, supply chain constraints and slowdown in China due to Covid.

Despite these multiple headwinds, Tata Steel margins improved as managed to increased domestic sales and countered the 15 per cent export duty on steel in the middle of the quarter, he said.

The European business delivered a sharp improvement in performance as long-term contracts and product mix helped drive a strong increase in realisations, he added.

The commissioning of 6 mtpa pellet plant at Kalinganagar in December quarter will drive cost savings, and it will be followed by the CRM complex and the 5 MTPA expansion project, said Narendran.

The company expects the volatility in steel price and input cost to continue in this quarter and stabilise in the second half of the year. It has earmarked an capex of ₹2,725 crore in Kalinganagar expansion.

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