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EBITDA rises 161% YoY; deleveraging accelerates

Tata Steel’s 3QFY21 consolidated rev / EBITDA / adj. PAT stood at INR396b/INR94.6b/INR38.3b, +11%/+161%/NA YoY and +5%/19%/23% v/s our estimate. However, EBITDA adj. for fair value changes stood at INR82.8b, +128% YoY / +36% QoQ (+4% v/s estimate).

S/A operations: EBITDA rises 77% YoY to INR67.0b on higher realization

* Revenue rose 10% QoQ to INR179.7b on the back of 18% QoQ improvement in realization, offset by 7% QoQ decline in volumes to 3.34mt (+5% v/s estimate).

* Realization stood at INR53,709/t, +18% QoQ (+4% v/s est. INR51,615/t).

* EBITDA/t stood at INR20,035/t, +56% QoQ (+12% v/s est. INR17,858/t).

* Reported EBITDA, thus, rose 45% QoQ to INR67.0b and was 17% higher than our estimate.

* Adj. PAT stood at INR37.5b, +69% QoQ (+27% v/s estimate).

Subsidiary operations

* Tata Steel Europe (TSE) reported EBITDA loss of INR7.2b v/s loss of INR4.6b in 2QFY21, and was below our expectation of EBITDA of INR5.7b. The miss on EBITDA was due to the reversal of wage support from the govt. (which was recognized in 2QFY21) and higher provisions for carbon emissions in 3QFY21.

* TSE sales volumes declined 7% QoQ to 2.1mt; however, production was up 20% QoQ to 2.59mt. TSE EBITDA loss stood at USD46/t v/s USD27/t in 2QFY21.

* Tata Steel BSL earlier reported EBITDA of INR16.2b (est. INR12.4b), up 47% QoQ on the back of higher realization (+19% QoQ) at INR51,185/t. EBITDA stood at INR16,262/t, +47% QoQ – the highest ever EBITDA reported by Tata Steel BSL since its acquisition.

Others

* Consolidated debt reduced by INR103b QoQ to INR884b.

* Tata Steel has called up INR465/sh as a final call on partly paid shares (77.7m share o/s). This would result in inflow of INR35.8b. The record date has been fixed as 19th Feb 2021.

* 9MFY21 consolidated revenue / EBITDA / adj. PAT stood at INR1,010b/INR160.8b/INR9.0b, -5%/+25%/NA.

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