May 29th 2024.
In a recent report, Tata Steel announced a significant decrease of 64.59% in its consolidated net profit, which amounted to Rs 554.56 crore during the March 2024 quarter. This decline was primarily attributed to lower realizations and certain exceptional items. In comparison, the company had posted a profit of Rs 1,566.24 crore in the same period last year. This information was shared by the company in a regulatory filing.
The total income of the company also witnessed a notable plunge, falling from Rs 63,131.08 crore in the January-March period of FY23 to Rs 58,863.22 crore. As for its expenses, they amounted to Rs 56,496.88 crore, lower than the Rs 59,918.15 crore recorded in the previous year. The company's revenues saw a 6% decrease due to lower realizations, which was partially offset by higher volumes in India.
Tata Steel clarified that the exceptional items mentioned earlier were mainly related to the impairment of heavy end assets and restructuring costs related to the UK business. Additionally, the company's board has recommended a dividend of Rs 3.60 per equity share of face value Re 1 each for FY24. Furthermore, the board has also given its approval for the issuance of additional debt securities, with the aim of raising up to Rs 3,000 crore through non-convertible debentures on a private placement basis.
In another significant decision, the board has also approved the proposal to infuse funds of up to $2.11 billion during FY25 by subscribing to equity shares of T Steel Holdings Pte. Ltd, a wholly owned foreign subsidiary of the company. These funds will be utilized for the repayment of external debt in Tata Steel's offshore subsidiaries and to support the restructuring costs in Tata Steel UK Limited, a wholly owned subsidiary of Tata Steel Ltd.
In addition, the company has also approved the proposal to convert debt instruments worth $565 million into equity shares during FY2024-25, which are currently held by the company in TSHP. It is worth noting that Tata Steel will continue to hold these converted equity shares. This decision is expected to have a positive impact on the company's financial position and pave the way for future growth opportunities.
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