Tata Steel reported a consolidated net loss of ₹1,229 crore in the December quarter, against a profit of ₹1,753 crore logged in same period last year, on lower realisation.

Net sales were down at ₹35,520 crore (₹38,854 crore). EBITDA per tonne of steel sold halved to ₹5,003 crore (₹10,404 crore).

Revenue from Indian operations stood at ₹21,299 crore (₹22,323 crore) for the quarter and reported EBITDA per tonne was ₹8,484. However, profit was lower at ₹1,194 crore (₹2,253 crore).

Economic slowdown

TV Narendran, CEO & Managing Director, said the company registered a strong growth in volumes despite poor macroeconomic conditions. In India, the company countered the slowdown by entering into new markets and expanding customer base.

However, the European operations made a loss feeling the brunt of the overall slowdown and the consequent shrinking of spreads, he said.

Steel demand in India is expected to improve on the back of increasing government spending and a revival in the broader economy.

Global growth

Global economic growth further slowed down amidst heightened concerns of a US-China trade war. Regional steel prices were down as steel demand was affected by weaker industrial output in key markets. However, Chinese apparent steel consumption remained steady and steel exports stabilised below 5 million tonnes a month.

In Europe, the overall slowdown was more pronounced due to seasonal weakness and elevated levels of unfairly priced imports.

The Indian economy remained weak during the quarter and domestic steel prices reached a nadir in last October, the company said.

However, steel prices are on an upward trend since November with inventory rationalisation and increase in government spending. Market sentiments have improved as the recent PMI manufacturing and bank credit growth data suggest pick-up in activity levels ahead.

Related Topics
comment COMMENT NOW