Tata Steel tumbles over 10% in three days

Tata Steel tumbles over 10% in three days

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Tata Steel slipped 0.86% to Rs 263.65, extending losses for the third day.

Shares of the steel maker have lost 10.12% in three sessions from its recent closing high of Rs 293.35 recorded on 17 April 2020.

Meanwhile, the company announced provisional steel production and sales figures for Q4FY20 and FY20 during market hours today, 22 April 2020.

Tata Steel India’s steel production rose 5.80% to 4.74 million tons while the sales volumes fell 14.61% to 4.03 million tons in Q4 March 2020 over Q4 March 2019.

The steel major said that the Government of India announced a nationwide lockdown with effect from 25th Mar 2020 to combat the spread of the COVID-19 virus. Steel and mining, being essential services and continuous process industries, are exempt from the lockdown measures subject to certain guidelines. However, the lockdown has led to logistic issues and lower demand driven by the shutdown of customer operations in automotive, construction and other segments since last few days of March 2020.

While this affected the domestic Q4FY20 sales, production side, however, witnessed a growth in volume.

Tata Steel India’s full year steel production rose 8.3% to 18.21 million tons while full year steel sales increased by 4.36% to 16.97 million tons in FY20 over FY19.

Due to practical constraints in continuing operations, the company is operating integrated steelmaking facilities at lower utilization levels while operations at the downstream facilities have been suspended and put on care and maintenance mode, Tata Steel said in a statement.

Tata Steel Europe, despite macro headwinds, was able to keep production and sales stable in Q4FY20 compared to Q3FY20. Overall European steel demand has declined compared to the normal conditions as many customers, including European car manufacturers, have currently paused production. The utilization levels are currently around 70% and dispatches are continuing in both UK and Netherlands.

Tata Steel Europe’s steel production fell 6.22% to 2.56 million tons while the sales volumes contracted by 7.7% to 2.37 million tons in Q4 March 2020 over Q4 March 2019. For the full year ended on 31 March 2020, European steel production fell 1.16% to 10.18 million tons while the steel sales declined by 3.83% to 9.27 million tons.

In South East Asia, Tata Steel’s production increased by 5.88% year-on-year (YoY) to 0.54 million tons while steel sales rose 1.69% to 0.6 million tons in Q4FY20.

In FY20, Tata Steel South East Asia’s steel production increased by 3.82% YoY to 2.17 million tons while the total steel sales remained flat 2.41 million tons.

Meanwhile, the steel major announced that the committee of directors has approved allotment of 5,100, 7.85% unsecured, redeemable, rated, listed non-convertible debentures having face value of Rs 10,00,000 each for cash aggregating to Rs 510 crore, to identified investor on private placement basis, on terms and conditions as mentioned in the information memorandum for the said issue. The NCDs are proposed to be listed on the Wholesale Debt Market (WDM) Segment of BSE.

On a consolidated basis, Tata Steel reported a net loss of Rs 1,130.65 crore in Q3 December 2019 as compared to a net profit of Rs 2,268.58 crore in Q3 December 2018. Net sales fell 8.7% to Rs 34,774.29 crore in Q3 December 2019 over Q3 December 2018.

Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum (MnTPA). It is one of the world’s most geographically-diversified steel producers, with operations and commercial presence across the world.

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