Q4FY21 Result Update - Tata Steel - ICICI Direct

Tata Steel reported a healthy operational performance in Q4FY21. In Q4, topline of consolidated operations was at Rs. 49977 crore (up 39% YoY, 19% QoQ), higher than our estimate of Rs. 47745 core. Tata Steel India's delivery volumes for Q4FY21 were at 4.67 million tonnes (MT), up 16% YoY, flattish QoQ. For Q4FY21, Tata Steel India's domestic deliveries increased 22% YoY to 4.16 MT while export volume for the quarter was at 0.51 MT (exports accounting for ~11% of overall deliveries for quarter). For Q4FY21, Tata Steel European operations deliveries improved 3% YoY, 17% QoQ to 2.47 MT. Consolidated EBITDA for Q4FY21 was at Rs. 14184 crore (up 48% QoQ, 196% YoY), in line with our estimate of Rs. 14052 crore. Consolidated EBITDA margin came in at 28.4% (22.8% in Q3FY21, 13.3% in Q4FY20). In Q4FY21, aggregate exceptional charge was at Rs. 991 crore. Hence, consolidated PAT was at Rs. 7162 crore, up 79% QoQ (our estimate: Rs. 7872 crore).

Valuation & Outlook

On the back of an increase in realisations both QoQ as well as YoY, Tata Steel's Indian operations reported a healthy performance. For the quarter, the healthy performance of Indian operations aided the consolidated operations. Going forward, we model consolidated EBITDA margin of 24.8% for FY22E and 21.8% for FY23E (FY21 EBITDA margin was at 19.5%). The debt repayment drive also augurs well. We value the stock on an SoTP basis and arrive at a target price of Rs. 1500 (earlier target price Rs. 1150). We maintain our BUY recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TataSteel_Q4FY21.pdf

Shares of TATA STEEL LTD. was last trading in BSE at Rs.1182.35 as compared to the previous close of Rs. 1100.55. The total number of shares traded during the day was 2700760 in over 53228 trades.

The stock hit an intraday high of Rs. 1192 and intraday low of 1129. The net turnover during the day was Rs. 3145047248.

Source : Equity Bulls

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