Views on Tata Steel 4QFY2015 Results - Angel Broking

Views of Mr. Rahul Dholam (Sr. Research Analyst - Metal & Mining, Angel Broking) on Tata Steel 4QFY15 Results First cut: Weak quarter for Tata Steel

Standalone revenues declined 13% yoy (7% sequentially) to Rs. 10,634cr, ahead of our estimate of Rs. 10,035cr. Realisation per tonne was at $709 higher than our expectation of ~$670. Raw Material costs were significantly higher at ~31% of revenues led by use of imported iron ore inventory, leading to a sharply lower than expected EBITDA margin at 16% (vs. our estimate of 23%). EBITDA per tonne came in at ~$110 per tonne as against $276/tonne last year and $150/tonne in 3QFY2015.

Both volumes and realization per tonne at Tata Steel Europe were lower than expected at 3.81MT and $824 respectively (vs. our estimate of 4.1MT and $846). EBITDA declined to INR 1,053cr as against our expectation of INR 1,188cr. EBITDA per tonne fell to ~$44 as against $49.1 in 3Q2015. Consolidated revenue declined 19% YOY at INR 33,337cr, as against our expectation of a 14% decline. EBITDA margin was lower at 7.5%, as against our estimate of 10.2%. Commissioning of the new Kalinganagar plant has commenced and FY16 capex is expected to reduce by 20%. (Rs. 13,492cr in FY15)

Shares of TATA STEEL LTD. was last trading in BSE at Rs.341.55 as compared to the previous close of Rs. 342.9. The total number of shares traded during the day was 573843 in over 8651 trades.

The stock hit an intraday high of Rs. 347.75 and intraday low of 340.8. The net turnover during the day was Rs. 197292207.

Source : Equity Bulls

Keywords