Its total income fell by 6 per cent to Rs 26,406.10 crore during the quarter under review, as against Rs 28,025.43 crore in the year-ago period, the Mumbai-based firm said in a BSE filing.
Total expenses were however lower at Rs 24,405.86 crore, from Rs 26,679.76 crore. Loss of Rs 3,296 crore from discontinued operations was recognised on account of divestment of Long Steel UK Ltd, it said, adding that the sale was completed during the quarter. Tata Steel’s gross debt rose to Rs 85,475 crore at the end of the June quarter of current fiscal, from Rs 81,975 crore in the year-ago period, mainly due to increase in India and Tata Steel Global procurement. Its net debt also rose by Rs 4,171 crore to Rs 75,259 crore.
“The company tapped the Commercial Paper market in India to capitalise on lower yields in the short end market. Power purchase agreements of captive nature have also been classified as finance lease under IND AS resulting in an increase in gross debt,” it added. The company said it has a strong liquidity position with cash and cash equivalents including drawn and undrawn lines of Rs 12,746 crore. Its total steel deliveries stood at 5.41 million tonnes in the April-June quarter of 2016-17. On asset sale, it said: “Tata Steel UK is currently progressing with the divestment of the Speciality Steel business and the pipe mills in Hartlepool. The shortlisted bidders are being given access to due diligence and management meetings.”
It further said: “As disclosed earlier, Tata Steel Europe continues to be in discussion with industry players to explore options for a strategic collaboration through a potential joint venture. Appropriate disclosure in the regard will be made in due course.” Tata Steel UK is in engagement with all relevant stakeholders including the UK government, the Trustee and the unions on the exposure to pensions of the UK business. The discussions are currently ongoing, it added.
The company incurred a capex of Rs 2,442 crore during the June quarter. Of this, Rs 1,118 crore was in India, largely on the completion of the 3 mt per annum greenfield steel plant at Kalinganager and related projects, while Rs 679 crore was incurred in Europe.
On outlook for India, Tata Steel said: “Realisation in Q2 2016-17 are expected to be affected by lower demand from large steel consuming sectors such as construction and capital goods as well as seasonal sluggishness due to monsoons.”
Demand is expected to pick up post-monsoon and the festive season on the back of increase in disposable income due to 7th Pay Commission award, good harvest and easier liquidity, it added.
Europe, Tata Steel said, is expected to continue to grow gradually though the UK’s stronger growth may slow down following its referendum result to exit the European Union. Supply side pressures from imports are expected to continue, it added.
... Shares plummet by over 5%; mcap crashes by Rs 2,029 crore
Tata Steel’s scrip on Monday fell by over 5 per cent, wiping-out Rs 2,029.39 crore from its market valuation, in-line with a weak stock market trend. Shares of the company tanked 5.30 per cent to settle at Rs 373.60 on BSE. Intra-day, it fell by 5.7 per cent to Rs 372. The stock was the worst performer among the 30-bluechip Sensex components. At NSE, the scrip dropped 5.39 per cent to close at Rs 373.30. The company’s market valuation fell by Rs 2,029.39 crore to Rs 36,284.61 crore.
On the volume front, 9.45 lakh shares of the company were traded on BSE and over 67 lakh shares changed hands at NSE during the day. Cautious trading ahead of the company’s June quarter result too pulled down the stock. Post market hours, Tata Steel reported a consolidated net loss at Rs 3,183.07 crore in the quarter ended June 30, 2016 against a net loss of Rs 316.91 crore in the year-ago period.