Shares of Tata Steel on Tuesday closed over 6 per cent higher after the company’s India operations generated a strong set of numbers for the quarter ended September. After opening on a bullish note, shares of Tata Steel touched its 52-week high of Rs 530.80 on BSE during the day. It closed at Rs 522.80, up 6.24 per cent.
Similar movements were witnessed on NSE as well, where the stock touched its 52-week high of Rs 530.95 during the day. The scrip ended the day on NSE at Rs 521.60, a gain of nearly 6 per cent.
Tata steel reported a consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) significantly higher than market expectation “driven by out-performance in Standalone India operations,” JM Financial Institutional Securities said in a research note. “India operations delivered an EBITDA of Rs 47 billion (vs JM Financial’s estimate of Rs 35 billion) – implying an EBITDA/t of Rs 13.9k driven by significant operating leverage as volumes increased 61 per cent QoQ,” the report said.
On Friday, Tata Steel Executive Director and CFO Koushik Chatterjee said that despite the pandemic, the company has delivered one of the best quarterly results in India in recent times. “This was driven by relentless focus on operating performance and a reduction in our cash costs by almost 14 per cent on a quarter on quarter basis,” he had said.
India operations, he said, generated an EBITDA of Rs 6,025 crore during July-September 2020. It was at Rs 4,033 crore in the year-ago period. However, Tata Steel’s consolidated net profit declined about 50 per cent to Rs 1,665.07 crore in the September 2020 quarter.