Tata Steel Ltd - First Cut - Microsec Research

Q4 FY12 Result Analysis -

Tata Steel Ltd announced its Q4 FY12 and Annual results on 18th May 2012. Tata Steel has posted Consolidated net profit of Rs 433.46 Crore for the fourth quarter ended March 31, 2012 as compared to Rs 4175.60 Crore profit for the quarter ended March 31, 2011, representing a decrease of 89.62%.

Total income has increased from Rs 33822.68 Crore for the quarter ended March 31, 2011 to Rs 33998.57 Crore for the quarter ended March 31, 2012, representing an increase of 0.52%.EBITDA Margin of the company declined from 13.20% to 9.35%.

FY12 Annual Result Analysis -

On a Yearly basis, its net sales increased by 11.91% to Rs 132899.7 crore and PAT decreased by 40% to Rs 5389.77 crore. EBITDA margin declined from 13.47% to 9.34%.Tata Steel posted a bigger-than-expected drop in fourth quarterly profit, hit by weak prices and lower volumes in its main European market.

In the same quarter last year, the steel maker's net profit was buoyed by a one time exceptional gain of Rs 2,279 crore on account of restructuring due to sale of Teesside Cast Products (TCP).

*Exceptional items consists of –

* Profit on sale of non current investments

* Restructuring, impairment & disposals

Outlook -

Tata Steel is planning to increase its domestic steel capacity from 6.8 to 9.7 MTPA by Q1FY13, which will drive a volume growth of 10.4% CAGR in the domestic market during FY13 period.

The Company's domestic business continues to remain robust due to captive raw materials (100% iron ore and 50% coking coal) and its rich product mix.

Source : Equity Bulls

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