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PrintTata Steel Ltd slipped over 2 percent in early trade on Monday after the steel major posted a bigger-than-expected drop in fourth quarterly profit on Friday last week, hit by weak prices and lower volumes in its main European market.
The group posted a net profit after taxes, minority interest & share of associates of Rs 433.46 crore for the quarter ended March 31, 2012, compared to Rs 4,175.6 crore for the quarter ended March 31, 2011.
"The company's revenue increased marginally by 1 percent on a YoY basis to Rs 33,999 crore in Q4FY12. EBIDTA income decreased significantly by 29 percent YoY to Rs 3,179 crore, primarily due to higher raw material cost and staff cost, led to increase in total operating expenses, as a percentage of revenues during the quarter," according to a KR Choksey report.
Consolidated net sales growth stood flat YoY at Rs 33,999 crore largely in-line with Street estimates. Its consolidated operating margins for the quarter fell to 10.1 percent from 14.1 percent a year earlier.
Standalone net sales increased by 13.8 percent YoY to Rs 9,375 crore. Consolidated sales volumes stood at 6.22 million tonnes in 4QFY2012 compared to 6.65 million tonnes in 4QFY2011.
"Average realization/tonne increased by 9.7 percent and 7.3 percent to $1,052 and $1,103 in Tata Steel India and Tata Steel Europe operations, respectively," Angel Broking said in a report.
Angel Broking maintains its 'buy' rating on the stock, and the target price is under review.
At 10:26 a.m., the Tata Steel stock was trading 2.4 percent lower at Rs 390.60. It has hit a low of Rs 389 and a high of Rs 401.85 in trade so far.
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