Tata Steel Q2 net profit plunges 90% to Rs 1,297 cr

NEW DELHI: Domestic steel giant Tata Steel on Monday reported a nearly 90 per cent drop in consolidated net profit to Rs 1,297 crore for the July-September quarter of 2023-23, dragged by higher expenses.

The company’s net profit stood at Rs 12,547.70 crore in the corresponding period of the previous financial year, Tata Steel said in a BSE filing. Its total income during July-September 2022 stood at Rs 60,206.78 crore as against Rs 60,657.98 crore in the year-ago period.

The firm’s total expenses rose to Rs 57,684.09 crore from Rs 47,239.63 crore earlier. Homegrown Tata Steel is among the top steel producers in the world.

Tata Steel missed analysts’ quarterly earnings estimates by a wide margin as profit slumped more than 87% due to a drop in steel prices amid a global economic slowdown.

Concerns over slowdown in key economies, geopolitical issues and seasonal factors have led to a “volatile opewrating environment”, CEO TV Narendran said.

“Utilisation of high-cost inventory of raw material and steel coincided with drop in realisations to result in margin decline across geographies,” Chief Financial Officer Koushik Chatterjee said.

Tata Steel has an annual crude steel capacity of 34 million tonnes per annum and last month approved combining six of its subsidiaries with the parent company to improve operational efficiency, optimise raw material utilisation and cut costs.