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Tata Steel Shares Drop On Q4 Business Update

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On Wednesday, Tata Steel's shares fell as much as 2.5 percent to Rs 259.25 after it released its business update for the fourth (Q4) quarter of the financial year 2019-20.

The company said the lockdown imposed in many countries to curb the spread of COVID-19 "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."

However, the has seen an increase in production volume.

Tata Steel Shares Drop On Q4 Business Update
Tata Steel: Quotes, News
BSE 265.45BSE Quote8 (-3.01%)
NSE 265.55NSE Quote7.9 (-2.97%)
 

"While this (lockdown) affected 4QFY20 sales volumes in India, however, production volume grew 6% YoY to 4.74 mn tons. Tata Steel India also achieved an 8%YoY production growth for the full year FY20, along with the best ever annual sales. This was supported by ramp up of Tata Steel BSL and acquisition of Usha Martin Steel business by Tata Steel Long products; Tata Steel BSL also recorded its best ever annual performance," the company said in its stock exchange filing.

It also said that Tata Steel India witnessed highest-ever annual sales in Branded Products and Retail segment with an increase of 8 percent over the last financial year.

"The company was successful in maintaining volumes for Industrial Products & Projects segment with a strong increase in sales in Oil & Gas and Industrial Pipe segment. It also sustained its focus on Automotive & Special products segment and increased share of high-end sales in the segment

volume from 19.5% in FY19 to 25% in FY20," it said.

The company further said that while its mining operations have been functioning normally based on government guidelines, there have been practical constraints in continuing operations, causing integrated steelmaking facilities to operate at lower utilization levels.

Operations at the downstream facilities have been suspended and put on care and maintenance mode.

Tata Steel Europe, amid guidelines of the relevant countries to combat COVID-19, has seen an overall decline in steel demand in the region 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," it said.

"Despite macro headwinds, the company was able to keep production and sales stable in 4QFY20

compared to 3QFY20," it added.

Read more about: tata steel
Story first published: Wednesday, April 22, 2020, 12:35 [IST]
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