Motilal Oswal: Tata Steel Q2 Review - Deleveraging A Key Positive
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Motilal Oswal Report
Tata Steel Ltd. has seen a strong recovery in profitability, led by higher steel prices.
Consolidated Ebitda rose 60% YoY to Rs 61.1 billion in Q2 FY21 (the highest in the last six quarters), and we estimate Q3 FY21 to be even stronger at Rs 71.6 billion (up 98% YoY).
Furthermore, net debt fell Rs 83 billion QoQ to Rs 988 billion (the lowest in the last six quarters), led by working capital release of Rs 103 billion.
The potential divestment of the company’s profitable Netherlands operations to SSAB could lead to further deleveraging.
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