Tata Steel Slumps as Q2 Earnings Disappoint

Tata Steel shares fell over 4 per cent on Friday after it reported weak earnings for the July-September quarter. Its earnings came after market hours on Thursday.

Its net profit rose to Rs 1,529 crore on a consolidated basis in the September quarter as compared to Rs 1,254 crore in the year-ago period.

However, the jump in its net profit was not due to operational performance. Its net profit got a boost on incomes of Rs 2,800 crore earned from the sale of investments during the quarter.

Its Europe business continued to be a drag on its overall business. Tata Steel took non-cash impairment charges of Rs 8,700 crore on its books towards "rapid and sharp deterioration" in the British business environment.

The crisis in Britain's steel sector escalated further last week as Tata Steel blamed its decision to cut British jobs on a flood of cheap imports, particularly from China.

Tata Steel's consolidated revenue fell 18 per cent year-on-year to Rs 29,305 crore against Rs 35,777 crore last year.

Its India business also continued to be under pressure. EBITDA or operating profit from its India business fell 40 per cent year-on-year, missing analyst's estimates. Its EBITDA/tonne, a key metrics for metal companies, fell 2 per cent sequentially to Rs 7,790.

Tata Steel shares closed 2.44 per cent lower at Rs 220.10 apiece compared to 0.15 per cent fall in the broader Sensex. (With agency inputs)