The steelmaker reported a near 50 per cent jump in revenues in the standalone business on a year-on-year basis, while the consolidated business saw sales rise 39 per cent.
“First half of financial year 2021 was a challenging period with the uncertainties and complexities brought on by the Covid-19 pandemic. Indian economy and domestic steel demand has been improving since then with accommodative policies, government spending and relaxation in mobility restrictions,” said managing director and chief executive officer TV Narendran.
Here are some of the major takeaways from the March quarter earnings of the company:
Debt reduction steps to continue
Tata Steel said that it will continue to reduce its net debt by $1 billion in the current financial year after the company reduced its net debt by Rs 29,390 crore. The company’s strong cash flow generation due to benign sector outlook has helped the company to substantially deleverage its balance sheet.
Operating performance strong
The company’s operating show in the quarter was stellar with standalone operating profit rising 150 per cent year-on-year. The company’s operating profit per tonne also came in higher-than-expected, which reflected the benefits from price hikes taken by the company. With domestic steel producers raising prices four times since the start of April, the company is in for another quarter of strong operating performance.
Company acknowledges Covid risk
While the company’s stock price may not reflect it, its CEO Narendran said that the second wave of Covid-19 was a risk. “We are working to minimize the impact on our employees and communities while meeting the requirements of our customers,” Narendran said.
Capex efforts stepped up
In a major move, Tata Steel said that it has restarted work at the 5 million tonne per annum Kalinganagar steel complex where the company will house a pellets and cold roll mill. The company has been taking efforts to complete the controversial expansion project for over six years.
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