Tata Steel’s Fourth-Quarter Sales Volumes Fall On Covid-19 Freeze
For the fiscal ended March 31, Tata Steel’s India business sales volume stood at 16.97 MT, up 4.36 percent over a previous fiscal.
Tata Steel Ltd.’s domestic and international sales volumes tumbled in the fourth quarter as lockdowns to contain the Covid-19 pandemic froze business activity.
Combined volumes of standalone business, Bhushan Steel and longs business fell 14.6 percent year-on-year and declined 16.9 percent over the previous quarter to 4.03 million tonnes, according to Tata Steel’s exchange filing. Production, however, rose 6 percent from a year earlier.
Sales volumes fell as the world’s biggest and strictest lockdown against the movel coronavirus outbreak left trucks stranded since March 25. That has stalled economic activity, prompting a cut in growth estimates for the previous quarter and the entire 2020-21 across sectors.
For the financial year ended March 31, Tata Steel’s India business sales volume stood at 16.97 million tonnes, up 4.36 percent over the previous fiscal.
Note: Tata Steel Indian operations numbers not fully comparable; corresponding numbers for longs unit not available.
International Business Performance
Tata Steel’s European business saw quarterly sales volume fall 7.8 percent year-on-year as many customers, including European carmakers, halted production. Sales in Southeast Asia, however, showed an uptick by 1.7 percent to 0.6 MT. For the full financial year, it remained flat at 2.41 MT.
Domestic sales volume were below estimates but the European business did relatively better than expected, Edelweiss Securities said. The brokerage, however, sees an inventory build-up. The Indian business showed production of 4.74 MT of liquid steel, while sales volume stood at 4.03 MT. Based on these numbers, Amit Dixit, assistant vice president-research at Edelweiss Securities, estimates the fourth-quarter operating income to be lower by 9 percent at Rs 3,560 crore against the previous forecast.
On Wednesday, Tata Steel shares rose 1.15 percent to Rs 269.00 apiece on the NSE while the benchmark Nifty 50 shed gained 2.29 percent to end the day at 9,187.30 points.