News

Published: November 6, 2024
Updated: November 6, 2024

Tata Steel Q2 FY25: Profit Rebounds to Rs 833 Crore Despite Revenue Dip

In the September 2024 quarter (Q2 FY25), Tata Steel reported a significant recovery with a consolidated net profit of Rs 833.45 crore, a major turnaround from the Rs 6,196.24 crore loss it faced in the same period last year. Here’s a look at the company’s financial highlights, changes in operational revenue, and recent board decisions.

Revenue Decline Despite Improved Profitability

Tata Steel’s revenue from operations dropped by 3.19% to Rs 53,904.71 crore compared to Rs 55,681.93 crore in Q2 FY24. This dip reflects softer demand and challenging market conditions, although the company's profitability has improved.

Expense Management and European Contributions

The company managed to reduce its expenses, which stood at Rs 52,331.58 crore in Q2 FY25, down from Rs 55,853.35 crore a year ago. While Tata Steel’s India business saw revenue fall to Rs 32,399.48 crore, its European operations provided strong support, continuing to be the second-largest revenue contributor.

Leadership Addition: Pramod Agrawal Joins as Independent Director

On November 6, 2024, Tata Steel’s board approved the appointment of Pramod Agrawal as a non-executive, independent director for a five-year term, pending shareholder approval. This strategic addition is expected to bring fresh insights to the board as the company navigates global market dynamics.

Stock Market Performance and Investor Interest

Tata Steel’s Q2 results were announced post-market hours, but the company’s shares had already risen by 0.85% to close at Rs 153.60 on the BSE. This growth contributes to a 153.60% year-to-date increase in share price. The trading session saw heightened interest, with 36 lakh shares traded—more than double the two-week average.

Key Indicators and Valuation Metrics

Tata Steel's stock is trading above its short-term SMAs (5, 10, and 20-day), while it remains below longer-term SMAs (30, 50, 100, 150, and 200-day). The stock's 14-day RSI stood at 51.09, indicating a balanced position between oversold and overbought. With a price-to-equity (P/E) ratio of 54.29 and a price-to-book (P/B) value of 1.38, Tata Steel’s EPS came in at 2.81, while RoE reached 2.54%. As of September 2024, promoters held a 33.19% stake in the company.

Despite a revenue dip, Tata Steel’s Q2 FY25 results showcase resilience, supported by profit recovery and strategic cost management. The company’s diversified presence, particularly in Europe, continues to underpin its financial health. Accordingly, Tata Steel's ongoing efforts in expense management and strategic board appointments could bolster its market position and investor confidence as it faces global market headwinds.