India’s steel giant – Tata Steel announced Q3FY20 results yesterday. The investors conference call highlights are mentioned below.
1.Company’s crude steel output inch down in Q3FY20 – Tata Steel, in its Indian operations witness 1% decline in its crude steel output at 4.47 MnT on quarterly basis in Q3FY20 against 4.50 MnT in previous quarter.However, on a yearly basis the same inch up by 2% in Q3 against 4.38 MnT in Q3FY19.
2.Steel deliveries grew by 17% in Q3 FY20- India steel deliveries grew by 17% Q-o-Q to 4.85 MnT in Q3FY20 against 4.13 MnT in previous quarter. However, on a yearly basis the same went up by 24% in Q3 against 3.89 MnT in same quarter of previous year.
3.Export deliveries surged by 33% in Q3FY20- Tata Steel export sales move up sharply by 33% to 0.85 MnT in Q3FY20 which was 0.64 MnT in previous quarter. Meanwhile on a yearly basis the same witnessed a whopping rise in Q3 against 0.30 MnT same quarter of previous year.
4.Branded & Retail and Industrial products deliveries grew in Q3FY20- In Q3FY20 branded retail deliveries grew by 22% and industrial deliveries grew by 12% on a quarterly basis.
5. Bhushan Steel deliveries grew by 21% Q-o-Q- In Q3FY20, Bhushan steel deliveries grew by 21% Q-O-Q to 1.26 MnT in Q3 against 1.04 MnT in previous quarter owing to higher exports and domestic sales. Also, company achieved highest ever quarterly sales of 1.26 MnT in Q3FY20.
Bhushan steel crude steel output stood at 1.15 MnT in Q3FY20 up by 7% against 1.07 MnT in Q2FY20. Meanwhile EBITDA for the quarter decline significantly to INR 284 Cr in Q3 against INR 527 Cr in previous quarter.
6.Tata Steel Long Product deliveries grew in Q3FY20- Deliveries of sponge stood at 0.187 MnT in Q3 against 0.141 MnT in previous quarter. Also, deliveries of steel stood at 0.162 MnT in Q3 against 0.118 MnT in previous quarter. Meanwhile captive iron ore production ramped up post monsoon and started commercial production at pellet plant for Tata Steel on conversion basis from 14th January 2020. Focus on improving market share across segments; added 11 new customers in 3QFY20 including non-automotive customers
7.Company’s EBITDA up by 7% Q-O-Q- In India, Tata Steel EBITDA moved up by 7% to INR 3,791 Cr in Q3FY20 against INR 3,546 Cr in Q2FY20. However the same on a yearly basis the same decline by 17% in Q3 against INR 4,559 Cr in Q3FY19.
8. Tata Steel Kalinganagar Phase Expansion- Tata Steel Kalinganagar phase II expansion is progressing well; Civil and structure construction work for ‘Pickling Line and Tandem Cold Rolling Mill’ at Cold Rolled Mill complex has progressed substantially. Equipment erection for the mill and entry section has also commenced. Engineering of the Continuous Annealing Line & Continuous Galvanizing Line’ and the Pellet plant is also nearing completion. Also, further expansion plans in Kalinganagar plant is dependent on domestic market conditions.
9. Expected to improve domestic demand – India steel demand is expected to improve in seasonally stronger Q4FY20 with increase in government spending and improving liquidity. Also, on a quarterly basis domestic demand reduced by 3 % in Q3FY20.
10.Net sales realization increase in Q3– On an average basis net sales realization is higher by INR 3000/MT in this quarter against the previous quarter. Thus, steel prices are on an upward trend since November with inventory rationalization and increase in government spending.Although regional steel prices were down last quarter as steel demand was affected by weaker industrial output in key markets.
11. Iron ore prices are expected to soften in Q4-International prices are expected to soften on improving supply and low off take from China in the near term. However, India domestic iron prices may increase if ongoing mine auctions result in disruption of operations.
12.Coking coal prices are expected to inch up in Q4- Coking coal prices are marginally up amid seasonal impact on supply.
13. Auto contracts negotiations in India – Auto contracts negotiations in India is lesser by INR 6000/MT in Q3, which is usually made for six months.
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