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Private steel maker Tata Steel is expected to report a 35.3 percent decline in consolidation profit after tax at Rs 593 crore in July-September quarter compared to Rs 917 crore in the year-ago period due to higher tax rate, according to the average of estimates of analysts polled by CNBC-TV18.
In Q2FY14, there was a deferred tax of Rs 390.02 crore.
Revenue during the quarter is seen falling 1.8 percent to Rs 35,990 crore in the quarter ended September 2014 from Rs 36,644.9 crore in same quarter last year due to weak European volumes (though Indian volumes may be marginally higher).
Operating profit (earnings before interest, tax, depreciation and amortisation) may grow 9.5 percent year-on-year to Rs 4,057 crore and margin may expand 120 basis points to 11.3 percent in the quarter gone by.
Margin improvement may be due to higher EBITDA per tonne in Europe though Indian margins may remain under pressure. Europe gains may be on account of lower raw material costs.
External iron ore purchases and lower international coal prices are likely to impact domestic business margin.
One off gains from the sale of Borivali land assets needs to be watched in second quarter results.
Indian operations:
Tata Steel’s standalone volumes may be increased 3 percent to 2.11 million tonnes in Q2FY15 from 2.04 MT in corresponding quarter of last fiscal.
Steel realisation is expected to be flat on sequential basis. Topline may be impacted by lower revenue from ferro alloy division due to shutdown of the Sukinda chrome ore mines.
Tata Steel Europe:
TSE deliveries are likely to come in lower by 1-2 percent at 3.4 MT as against 3.46 MT on year-on-year basis.
Key issues to watch out for are resolution of captive iron ore mining issue, impact of softening import steel prices on NSR, impact of iron ore purchases on cost of raw material and impact of closure of Sukinda chrome ore mines.
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- [Editor:sunzhichao]
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