Tata Steel share surged over 5 per cent to hit an all-time high of Rs 1,128.80 on the Bombay Stock Exchange after the company reported better-than-expected earnings during the March quarter of 2021.
Shares of Tata Steel rose over 2 per cent to hit a 52-week high on Wednesday, ahead of Q4 earnings, on BSE. The stock has given 157 per cent returns over the last six months and risen 294 per cent over the last 12 months. On a year-to-date basis, the steelmaking arm of Tata group has gained around 70 per cent.
Indian steel major Tata Steel delivered 17.31 million tonnes of steel during the fiscal under review, as opposed to 16.97 million tonnes in the year-ago period. The company also achieved its highest's ever quarterly EBITDA at Rs 12,295 crore in Q4 FY21, up 40 per cent and 2.7 times that seen in the year-ago period.
"Tata Steel reported its highest ever standalone profitability of Rs 27,800, partly boosted by inter-company iron sales. Europe's profitability, meanwhile, was better than we estimated at $66/t while the impact of carbon costs was $40/t. We await clarity on the split between recurring and one-off, and also the impact of the wage support reversal," said CLSA.
"We would note spot European spreads are $240/t higher than the Q4 average, which augurs well for FY22 profitability. Among other international business, South East Asia (SEA) is now reclassified as a continuing business, contributing Rs 290 crore to Q4 EBITDA & 0.6mt to quarterly volume," it added.
CLSA also said that the outlook for steel prices, Europe profitability and the timeline for expansion will be key.
"The second wave of COVID-19 in India is a risk and we are working to minimise the impact on our employees and communities while meeting the requirements of our customers," said Tata Steel CEO TV Narendran.
Tata Steel's board of directors recommended a dividend of Rs 25 per fully paid equity share of Rs 10 each (250 per cent) to the shareholders of the company for FY21. Further, in respect of the outstanding partly paid-up ordinary shares of the company on which call money remains unpaid as on the date of book closure for the dividend payment, Tata Steel said the dividend will be paid in proportion to the amount paid upon such shares, i.e., Rs 6.25 per partly paid-up ordinary share of Rs 10 each (paid-up Rs 2.504 per share).