India’s major steel giant -Tata Steel has announced Q4FY18 and FY18 yesterday (i.e on 17 May’18). Tata Steel – India produced 12.48 MnT steel in FY18,up by 7% compared to 11.68 MnT in the previous fiscal. The investor conference call highlights are mentioned below.
1. BF outage in Kalinganagar resulted drop in Q4 production volume- On quarterly basis company’s crude steel output went down by 6% to 3.07 MnT in Q4FY18 against 3.27 MnT in previous quarter due to blast furnace outage in Kalinganagar plant. The outage in BF resulted in loss of around 250,000MT. The issue has now been resolved and the plant is running in full capacity.
2.Company’s deliveries increase by 11% in FY18– Tata Steel India deliveries surged by 11% to 12.15 MnT in FY18 which was 10.97 MnT in FY17.Although on quarterly basis deliveries fell by 8% to 3.03 MnT in Q4FY18 against 3.30 MnT in Q3FY18.
3.Company’s EBITDA for its India operations moved up by 32% in FY18-In India Tata Steel EBITDA move up by 32% on yearly basis.In FY18 company reports EBITDA at INR 15,800 Cr as compared to INR 11,944 Cr in previous fiscal.
4.Anticipates 6% growth in Indian steel demand in FY19- Tata Steel company officials remained optimistic in terms of demand forecast by 6% in FY19. Expect healthy growth in segments like Auto, Railway, Engineering, Construction, LPG, Tubers and Galvanizes.Also Indian finished steel demand is expected to grow by 7% to 98 MnT in FY 19 which is 92 MnT in FY18.
5.Targeting 100% capacity utlization for Bhushan Steel in next few years – After getting approval from NCLT and CCI for acquisition of Bhushan Steel, Tata Steel is eyeing to increase its operational efficiency. Bhushan Steel has steel capacity of around 5-5.5 MnT pa but is currently operating at 3.5 MnT pa. Tata Steel is trying to increase its capacity utilization to 100% in next couple of years. Tata Steel will be benefited from the synergies like – downstream capacities which Bhushan Steel has.
6. Steel Imports to India may rise amid imposition of Section 232-It is estimated that imports to India may rise in near terms owing to imposition of USA tariffs on steel as it has created uncertainty around global trade flows.
7.Indian steel prices to remain range bound- Indian steel prices to remain range bound in coming quarter on arrival of monsoon season.However in this quarter domestic steel prices increased with improved demand and by favorable regional price sentiments. In Q4 FY18, better prices resulted in better sales realization.
8. Reduction in Coke rate – Tata Steel continued to focus on operational efficiencies to 348 kg/thm in FY18 against 360kg/thm in previous fiscal.
9.Tata Steel, India segment sales highlights in FY18 – Automotive sector sales grew by 17% on Q-o-Q basis driven by skin panel and high tensile sales.Meanwhile sales in branded products, retail & solutions and Industrial products witness growth in FY18.
10 .Kalinganagar plant expansion plans – The company has proposed expansion plans which includes investments in upstream facilities.This project cost INR 23,500 Cr out of which Rs.16,500 crores up to HRC stage and balance on raw material facilities and 2.2MTPA cold rolling mill.
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