InvestorQ : How do you see Tata Steel post the results announced for the Mar-20 quarter?
diksha shah made post

How do you see Tata Steel post the results announced for the Mar-20 quarter?

Answer
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3 months ago


There was not much of a surprise as Tata Steel reported net loss of Rs.1236 crore for the Mar-20 quarter. This compares quite unfavourably with a net profit of Rs.2353 crore that Tata Steel reported in the Mar-19 quarter. Total sales revenues fell by 20% to Rs.33,770 crore in the quarter with problems in India and the European operations.

The big hit on the Tata Steel performance came from the slowdown in the auto and consumer sector, which are the two big markets for the steel. There was also a virtual shut down in the construction activity. Of course, exports of steel to China picked up but that was still to minuscule by the overall volumes of Tata Steel to make a marked difference.

It cannot be just blamed on the lockdown as it was only in the last week of March. Tata Steel has debt of Rs.104,000 crore and is focusing on conserving cash. The focus on costs and cash should be positive for the stock. Tata Steel stock should actually benefit from the recent government plan to boost sales of domestic steel at the cost of cheap steel imports.