Tata Steel 3QFY2016 Results - EBITDA disappoints led by poor performance in Europe - Angel Broking

Views of Mr. Rahul Dholam (Sr. Research Analyst - Metals & Mining, Angel Broking) on Tata Steel 3QFY2016 Results:

Tata Steel 3QFY2016 Results First cut: EBITDA disappoints led by poor performance in Europe

"Standalone revenues declined 8% on a YoY basis and 5% sequentially to INR 9,064cr, 5% ahead of our estimate of INR 8,622cr. Volumes came in 7% ahead of estimates, while realisation per tonne at $ 585/tonne was lower than our estimate of ~$ 605/tonne. Material costs however increased significantly at INR 2,501cr (~28.7% of revenues), 11% ahead of our estimate of INR 2,261cr. Other expenses also came in ahead of expectations, resulting in lower than expected EBITDA at INR 1,498cr vs. our estimate of INR 1,662cr. EBITDA per tonne dipped to $ 97 as against our estimate of $ 115. Corus volumes were 5% below our estimate at 3.35MT, while realisations were in line with estimates. However EBITDA loss was much worse than expected at INR 675cr as against our expectations of INR 365cr.Consolidated revenue declined 16% YOY at INR 28,039cr, as against our expectation of INR 29,305cr. Consolidated EBITDA came in at INR 814cr, down 54% YoY, and well below our expectations of INR 1,176cr. Consolidated net loss came in at INR 1,415cr (excluding exceptional) as against our expectations of INR 1,387cr, led by lower than expected EBITDA. We retain our NEUTRAL rating on the stock."

Shares of TATA STEEL LTD. was last trading in BSE at Rs.226.15 as compared to the previous close of Rs. 224. The total number of shares traded during the day was 1900589 in over 22034 trades.

The stock hit an intraday high of Rs. 228.5 and intraday low of 219.15. The net turnover during the day was Rs. 423783453.

Source : Equity Bulls

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