Tata Steel’s Deleveraging Continues: Motilal Oswal
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Motilal Oswal Report
Tata Steel Ltd. reported a strong Q3 FY21, with consolidated Ebitda rising 161% YoY to Rs 94.6 billion (the highest ever) on the back of higher prices.
Furthermore, net debt fell Rs 103 billion QoQ to Rs 884 billion (the lowest in the last 12 quarters), led by working capital release of Rs 72 billion.
We estimate Q4 FY21 Ebitda to be even stronger at Rs 132 billion (up 40% QoQ), with standalone Ebitda/tonne of Rs 25,780/tonne (the highest in 12 years).
Spot steel spreads have, however, declined in the past month, and we expect further moderation on softening prices.
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