Tata Steel, India’s largest private steel maker, is expected to report a consolidated net loss of ₹2,276.8 crore for the June ended quarter, according to a Bloomberg poll of eight analysts. The company had reported a ₹702 crore net profit in the year-ago period.
Consolidated revenue is seen at ₹23,542 crore, 34% lower than the ₹35,947 crore it reported last year, according to a poll of six analysts.
In April, Tata Steel’s India business operated at about 50% capacity following the nationwide lockdown imposed to curb the spread of coronavirus pandemic. With the phased easing of restrictions, Tata Steel’s upstream steelmaking operations ramped up in the latter part of the quarter to reach 80% utilisation levels. However, downstream units took longer to reach optimum utilisation as domestic market had softened.
The company’s management had said in June that they were expecting a “muted Q1FY21” on account of covid-19 related disruptions but would return to normal capacity utilisation by Q2FY21.
During the first quarter of the year, with domestic demand for steel nearly negligible, Indian mills produced almost exclusively for export in order to keep cash flowing even though margins on overseas sales were lower than in the domestic market. Realisation for steel companies have fallen about 15% year-on-year as export prices are down 25% compared to last year.
In the March quarter, Tata Steel reported consolidated net loss of ₹1,236.17 crore on a provision for impairment on asset held within the European operations, overseas mining and Indian operations. Tata Steel, at that time, had said that in view of the covid-19 pandemic and the related lockdown, operations at the group’s steel making facilities in India have been scaled down from the end week of March 2020.