Tata Steel (TATASTEEL) Q4 96/97 earnings summary

Executive summary

• FY1996-97 turnover rose 8.5% to Rs. 6,351.46 crore; operating profit edged up to Rs. 1,164.13 crore, while profit after tax fell to Rs. 469.21 crore from Rs. 565.79 crore.

• Efficiency gains, cost control and richer steel mix supported results amid weak demand, price pressure, high interest rates and delayed infrastructure projects.

Financial highlights

• Revenue including other income was Rs. 6,409.43 crore, up from Rs. 5,879.96 crore; steel sales volume increased ~4% to 2.583 million tonnes.

• Profit before tax and Employee Separation Compensation rose to Rs. 620.91 crore from Rs. 602.44 crore; reported PBT was Rs. 542.21 crore after Rs. 78.70 crore separation compensation.

• PAT was Rs. 469.21 crore after Rs. 73 crore tax provision, including MAT; prior-year PAT was Rs. 565.79 crore.

• Proposed ordinary dividend remained Rs. 4.50/share, or 45%; total proposed dividend was Rs. 165.66 crore before Rs. 16.57 crore dividend tax.

Outlook and guidance

• Modernisation Phase IV was progressing to plan, with facilities expected to commission progressively from H2 of FY1997-98.

• Gopalpur cold-rolling project: 2,700 acres acquired, technology and process finalised, and equipment bids under evaluation; project infrastructure pace remained a concern.

• Long-term demand outlook rested on industrial, agricultural and infrastructure growth; domestic per-capita steel consumption was 20 kg, with a stated need to triple over 8–10 years.