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Tata Steel Ltd is likely to provide a series of strong numbers on Tuesday, when it comes out with March quarter income, according to experts.The company is likely to report the consolidated income of RS 68,737 Crore in the March quarter, up 38 percent from last year, led by a strong increase in realization in India and in Europe. Consolidated net profit can surge 44 percent in the year to 9,580 crore hospitals. In sequence, income and profits tend to be flat.
However, consolidation margin tends to contract sharply mainly because the price of iron ore is higher, while domestic margins tend to fall in the middle of higher coal prices. The EBITDA margin can drop to 22.5 percent in the quarter from 28.4 percent a year ago and 26.1 percent of the last quarter.Analysts tend to oversee management comments about profitability and cash flow from European operations, and update the growth of capex. Let’s check what analysts expect from Tata Steel’s income.
The Mandiri Tata Steel volume is expected to grow sharply by 17 percent of the quarter in the quarter (qoq) to 5 million tons. The realization is expected to drop 2.5 percent or 1,900 rs per ton qoq to RS 73,380 per ton. Because of a higher decline in realization and cost, Domestic EBITDA/T will drop 8 percent/RS 2,300 QoQ to RS 26,360.
The Tata Steel Europe (TSE) operation is expected to report EBITDA/T of $ 200, up 10 percent in the quarter due to volume expansion and increased spread. Because of the strong performance in TSE partially balanced by the decline in margin in domestic operations, Prabhudas Lilladher expects EBITDA to be consolidated to grow by 8.6 percent QoQ to 17,300 Crore RS.
Kotak Institutional Equities
Estimated Broker of Steel Realization to decrease 2 percent in the quarter (up 56 percent yoy) which is influenced by an increase in back prices in Q4fy22. It expects the volume to increase 6 percent yoy (+12 percent QoQ) at 4.9 million tons (MT) in higher exports and increase domestic demand. India Ebitda/Ton to reject 11 percent QoQ to RS 24,561 per ton (+25 percent yoy) which is influenced by higher coal coal costs.The brokerage company estimates that Eure Ebitda/Ton $ 206 per ton (Qoq +12 percent, +214 percent yoy) to benefit from higher prices in the region and lower costs based on consumption.
Axis Capital
Income grows due to higher steel prices and steel delivery. Tata Steel has released temporary production and shipping. Group steel delivery is higher at 13 percent QoQ and 4 percent yoy.EBITDA is expected to increase slightly due to the impact of higher raw material costs (coal coal) balanced with higher steel prices and margin pressure due to higher coal prices. PAT and EPS to widely follow the growth of EBITDA.
IDBI Capital
The Tata Steel Topline is expected to grow 23 percent yoy in Q4fy22 which is led by a strong increase in realization in India and in Europe.However, its consolidated EBITDA is likely to decrease by 1.9 percent yoy mainly due to a decline in spreads in the European steel business.
Edelweiss Research
Domestic EBITDA Tata Steel will be influenced by higher coal prices for domestic operations. Delivery rises because the realization of the mixture is expected to be a flat qoq. Profitability is expected to be influenced by higher coal prices.
Tata Steel Europe Ebitda is also influenced by higher iron ore prices.
On Monday, Tata Steel was closed at RS 1295.10 in BSE, up 1.84 percent from the previous closure, while Benchmark Sensex fell 0.15 percent to 56,976 points.
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