Tata Steel spurts on strong Q1 results; surges over 30% in 6 days

MUMBAI: Tata Steel has beaten street estimates by a huge margin. The company’s net profit surged 90.5 per cent to over Rs 1,100 crore for the quarter ended June 2013 as compared to a net profit of Rs 598 crore in the corresponding quarter last fiscal.

At 09:30 a.m.; the stock was at Rs 256.80, up 6.49 per cent, on the BSE. It touched a high of Rs 263 and a low of Rs 255.10 in trade today. The stock has rallied over 30 per cent from closing price of Rs 198.6 on August 6, 2013.

Sales for the quarter slipped to Rs 32,550 crore, down 3 per cent as against Rs 33,547 crore in year-ago period.

The company’s EBITDA/tonne of steel in India was at $258/tonne and for Europe it was at $43/tonne.

“The EBITDA/tonne surprise was likely due to fixed costs getting transferred to inventory. With high inventory, spot prices weak and intent to regain share, this does not portend high margins ahead,” said Credit Suisse report.

Other income declined to Rs 183.6 crore, down 36.5 per cent, vs Rs 289.4 crore during the same quarter last fiscal. The company reported deferred tax gain of Rs 415 crore as compared to Rs 188 crore expense, YoY.

The steel major also reported healthy margins at 11.5 per cent as against 10.6 per cent in the same period a year ago.