MUMBAI – Tata Steel Ltd’s operations are likely to remain under stress in Jan-Mar, as steel prices are seen weak through the quarter leading to poor realisations, analysts said.
On Thursday, the steel major reported a consolidated net loss of 21.3 bln rupees for the quarter ended December, compared with a 1.6-bln rupee net profit year ago and a profit of 15.3 bln rupees in Jul-Sep.
Cheap imports from China, restructuring at European operations and employee separation compensation charges taken for the India’s business resulted in a consolidated loss that was far worse than analysts’ estimates.
The net debt of the company rose by 15 bln rupees to 751 bln rupees in Oct-Dec, the company said in its conference call on Thursday.
“While net losses of 21.8 bln rupees were led by a restructuring charge of 7 bln rupees, an uncertain timeline on turning the European business EBITDA (earnings before interest, taxes, depreciation and amortisation)-positive and a likely decline in domestic steel prices in Jan-Mar is worrisome,” Religare Capital Markets said regarding company’s Oct-Dec earnings.
