Tata Steel Q3 results preview: Profit may plunge up to 97% on weak European operations

Tata Steel is expected to report an up to 97 per cent drop in consolidated net profit for the December quarter on a double-digit drop in sales.  Lower volumes and a sharp fall in Europe realisations may drag the overall performance, analysts said.

Nuvama Institutional Equities expects Tata Steel to report 96 per cent YoY drop in net profit at Rs 394 crore compared with Rs 9,766 crore in the year-ago quarter. Revenue is seen falling 12 per cent YoY to Rs 53,499.40 crore compatred with Rs 60,783 crore in the year-ao quarter. It sees Ebitda per tonne to increase 34 per cent sequentially to Rs 11,724 per tonne, owing to the benefit coming from lower coking coal prices due to lag effect.

"The realisation however may fall 3 per cent QoQ to Rs 64,935 per tonne due to fall in steel prices. The major disappointment is expected to come from Europe that should saw Ebitda losses ($79 per tonne compared with Ebitda of $120 per tonne in Q2FY23) due to lower steel prices," it said.

Elara Securities sees profit at Rs 353.70 crore. It sees revenue falling 8.9 per cent YoY to Rs 55,119.40 crore. Centrum Broking expects Tata Steel to declare  profit at Rs 598.40 crore. It sees revenue for the quarter dropping 10.3 per cent YoY to Rs 54,552 crore.

Phillip Capital sees profit plunging to Rs 265.40 crore. Revenues are seen at 529,175, down 12 per cent. Though domestic Ebitda per tonne improved, lower volumes and sharp fall in Europe realisations may drag the overall performance, it said.

The steelmaker had in its December quarter business update said India crude steel production stood at 5 million tonnes for the quarter, up 4 per cent on both year-on-year (YoY) and sequential basis. Deliveries for the quarter, the Tata group firm said, stood at 4.73 million tonnes, up  7 per cent YoY, primarily driven by 11 per cent growth in domestic deliveries. The growth was also led to improvement in product mix.

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