Tata Steel falls as Q4 results disappoints

MUMBAI: Shares of Tata Steel plunged as much as 5.56 per cent in early trade as the company disappointed on bottomline and topline figures in Q4FY15 due to weakening commodity prices and low volumes.

The company reported consolidated loss of Rs 5670 crore against a net profit of Rs 1035 crore, in the corresponding quarter last fiscal. It also reported exceptional loss of Rs 4,811 crore.

It is far lower than ET Now poll estimate of net profit of RS 230 crore.

Consolidated sales fell to Rs 33,340 crore, down 20.7 per cent, from Rs 42,018 crore, in the same quarter last fiscal. Operating margins plunged to 4.6 per cent vs 11.8 per cent, Y-o-Y.

"Tata Steel reported weak set of Q4FY15 earnings. Indian operations disappointed due to higher than expected costs. While, Tata Steel Europe (TSE) posted better than expected EBITDA at US$170m/EBITDA/t at US$45 (+6% QoQ), ahead of our estimate of US$145m/EBITDA/t of US$40," said Prabhudas Lilladher report.

"Given the sluggish outlook on iron ore and underlying weakness in steel sector, we downgrade the stock from Accumulate to Reduce with TP of Rs325, EV/EBITDA of 6x FY17E," the report added.