Tata Steel’s second quarter profit plunged 90% to £129.7 million due to drop in metal prices and elevated input costs. Concerns over slowdown in key economies, geopolitical issues and seasonal factors have led to a “volatile operating environment”, MD T V Narendran said.
Operating profit, a yardstick for underlying business performance, slumped 62% to £627.1 million during Q2 FY23. “Utilisation of high-cost inventory of raw material and steel coincided with drop in realisations to result in margin decline across geographies,” CFO Koushik Chatterjee said.
Operating profit of the main India business dipped 62% to £513.5 million while that of the European unit fell 46% to £178.8 million. Second-quarter revenue from operations marginally declined to £5.98 billion. The management expects the operating environment to improve in the second half of this fiscal on government measures and restocking. The margins should benefit across geographies from gradual recovery in Indian markets and favourable movement in raw material prices, especially coking coal, it said.