(PTI) Domestic steel giant Tata Steel on Monday reported a nearly 90 per cent drop in consolidated net profit to ₹1,297 crore for the July-September quarter of 2023-23, dragged by higher expenses.
The company's net profit stood at ₹12,547.70 crore in the corresponding period of the previous financial year, Tata Steel said in a BSE filing.
Its total income during July-September 2022 stood at ₹60,206.78 crore as against ₹60,657.98 crore in the year-ago period.
The firm's total expenses rose to ₹57,684.09 crore from ₹47,239.63 crore earlier.
On a standalone basis, the net profit fell to ₹2,655 crore from ₹8,708 crore in July-September 2021.
Its standalone income was at ₹33,262.62 crore during the quarter under review, as against ₹33,068.74 crore a year ago.
Total expenses grew to ₹29,708.05 crore from ₹21,338.34 crore in the year-ago-quarter.
In a separate statement, T V Narendran, the company's chief executive officer and managing director, said concerns about slowdown in key economies, persisting geopolitical issues coupled with seasonal factors led to a volatile operating environment.
"However, despite these headwinds, Tata Steel registered best ever domestic sales in India enabled by a strong product portfolio and an extensive distribution network which services end to end requirements in chosen segments," he said.
The company's pellet plant at Kalinganagar with 6 million tonne per annum (MTPA) capacity is coming on stream shortly and will deliver significant benefits by reducing costs. The company will begin the phased commissioning of the 2.2 MTPA cold rolling mill complex and the 5 MTPA capacity expansion at Kalinganagar thereafter.
Tata Steel commissioned Neelachal Ispat Nigam Limited (NINL) within 3 months of acquisition and the ramp-up is progressing well. The company has also commenced work at its new 0.75 MTPA Electric Arc Furnace (EAF) at Punjab and will continue to set up more EAFs in the country.
Koushik Chatterjee, its executive director and chief financial officer, said: "Globally, gross steel spreads declined amidst concerns about global recovery and elevated input costs including energy. Utilisation of high-cost inventory of raw material and steel coincided with drop in realisations to result in margin decline across geographies."
The margins should benefit across geographies from gradual recovery in Indian markets and favourable movement in raw material prices, especially coking coal, he said.
"Energy costs in Europe continue to remain a key watchpoint. We continue to remain focused on cost optimisation, operational improvements and working capital management to maximise cash flows. Our liquidity position continues to be strong and credit metrices remain at Investment grade levels.
"The proposed merger of seven listed and unlisted entities to be value accretive by enabling faster growth, optimal resource use and will provide greater liquidity to shareholders," Chatterjee added.
According to Tata Steel, its deliveries in India were higher by 21 per cent quarter-on-quarter (q-o-q) and 7 per cent year-on-year (y-o-y), primarily driven by record domestic deliveries.
The turnover of India operations was at ₹34,114 crore.
"Deliveries were lower on q-o-q basis, in part due to seasonal factors and subdued demand in Europe. Turnover was (pound) £2,307 million and EBITDA was £199 million, which translates to an EBITDA per ton of £106," it said.
Tata Steel is among the top steel companies in the world with an annual crude steel capacity of 33 million tonnes per annum.