Tata Steel rises on Q2 volume growth
Tata Steel is up nearly close to 1.5% at Rs. 307, when broader NSE Nifty is very flat in trade. Share had touched a high of 309.70 in trade, before cooling down to the current levels. It has reported healthy double-digit growth in production and sale numbers for quarter and half year ended 30th September 2013, on an annual comparison.
Crude steel production stood at 2.29 million tonnes in Q2FY14 (up 19% YoY and 3% QoQ) and at 4.51 million tonnes in H1FY14 (up 21% YoY). As against this, deliveries for Q2 stood at 2.03 million tonnes (up 18% YoY and 2% QoQ) and 4.04 million tonnes in H1 (up 22% YoY). In flat products, company has surpassed its earlier best-ever production and sale of H2FY13. It produced 2.81 million tonnes in H1FY14, and sold 2.66 million tonnes of flat products at, beating its previous best of 2.59 million tonnes produced in H2FY13.
Despite pick-up in volumes and business activity, India Ratings has maintained a negative outlook, on account of the company’s higher-than-expected net financial leverage in FY13 together with uncertainty regarding deleveraging in the near-term, keeping profitability under pressure in the near term due to slower volume growth in Europe and lower growth trajectory in India.