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Tata Steel: Its Europe again - Views on News from Equitymaster
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Tata Steel: Its Europe again
Nov 13, 2015

Tata Steel has announced the second quarter results of financial year 2015-2016 (2QFY16). While the topline declined by 18.1% YoY, bottomline grew at 21.9% YoY during the quarter.
Performance summary:
  • Income from operations declined by 18.1% YoY during 2QFY16 and other operating income also declined by 12.3% leading to decline in total income by 18.1% YoY during 2QFY16.
  • Operating Margin has also declined by 4% to 6.2% from 10.2% during 2QFY15.
  • Other income surged during this quarter by whopping 814% which includes gain of Rs 28.08 billion on sale of quoted investments.
  • Due to increase in other income and lesser tax outgo, net profit increased by 21.9% YoY despite an increase in exceptional item which has increased by 149.2% YoY during 2QFY16 due to provision for impairment of non-current assets, provision for demands and claims, employee separation compensation and restructuring and other provisions.
  • Net profit for the first half grew by 44% YoY due to surge in other income and lower tax outgo.

Standalone financial performance

(Rs m) 2QFY15 2QFY16 Change 1H FY15 1H FY16 Change
Total Income 357,771 293,047 -18% 722,043 596,050 -17.4%
Total Expenses 321,343 274,742 -14.5% 642,889 550,003 -14.4%
Operating profit (EBITDA) 36,428 18,305 -49.8% 79,154 46,047  
Operating profit margin (%) 10.18% 6.25%   10.96% 7.73% -29.5%
Other income 3215 29382 813.8% 5377 37004 588.2%
Interest 12328 10487 -14.9% 24852 21468 -13.6%
Depreciation 14295 13708 -4.1% 29798 27173 -8.8%
Profit before tax & exceptional items 13021 23491 80.4% 13021 34410 164.3%
Exceptional Item 11450 -5637 -149.2% 8,825 -4,053 -145.9%
Tax 11748 2402 -79.6% 22,552 7,555 -66.5%
Minority Interest -33 -8 -74.9% -177 59 -133.5%
Share of profit / (loss) of associates -146 -157 7.3% -61 56 -191.7%
Net Profit 12543 15287 21.9% -944 22917 -2527.6%
Net profit margin (%) 3.5% 5.2%   -0.1% 3.8%  
No. of shares (m)         970.24  
Basic diluted earnings per share (Rs) ^         -33.24  
P/E ratio (x) *         N.A.  

(^annualised, * on trailing twelve month earnings)

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