Tata Steel reports strong production; approves BSL merger
Largest steelmaker Tata Steel reported its fourth quarter result of FY19, on Thursday. The company’s consolidated revenue from operation for the quarter was at Rs. 42,424 crore, up by nearly 26 per cent from the corresponding quarter of the previous year. However, the company witnessed a sharp fall of 84.37 per cent in its net profit at Rs. 2,295.25 crore for the quarter from Rs. 14,688 crore in Q4FY18.
The production for the quarter was at 7.21 million tonnes as compared to 5.7 million tonnes in the corresponding quarter of the previous fiscal.
For fiscal year 2018-19, the company reported 48.78 per cent declined in its consolidated net profit at Rs 9,098.33 crore from Rs 17,762.81 crore for the previous year. However, the consolidated total income of the company increased by 27.28 per cent at Rs 1,59,089.57 crore for the year under review as compared to Rs. 1,24,990.79 crore for the year ended March 31, 2018.
In second half of FY19, the company reduced its gross debt by Rs. 17,864 crores and it aims to utilise divestment or monetization proceeds for the purpose of deleveraging.
Business update
In April 2019, the company completed Usha Martin Limited's (UML) steel business acquisition. The company believes the acquisition would expand and make its portfolio more attractive.
Further, Tata Steel has received approval to merger Bamnipal Steel and Tata Steel BSL (formerly Bhushan Steel) into the company by way of a composite scheme of amalgamation and has recommended a merger ratio of 1 equity share of Rs 10 each fully paid up of the company for every 15 equity shares of each fully paid up held by the public shareholders of Tata Steel BSL.
Besides, the expansion at Kalinganagar by 5 MTPA Phase II is on track.
Also, on Friday, Tata Steelworks' plant at Port Talbot in South Wales, UK reported a fire following three blasts at the plant. Two persons have received minor injuries due to the explosion, said the company.
In response to the good results, the stock of Tata Steel shines on the bourses and at 12:50 hours the stock was trading Rs. 540 apiece, up by nearly 5.7 per cent from previous close.