Tata Steel Faces Losses in Q2 FY24 Amidst Industry-Wide Challenges

Tata Steel witnessed a flat opening in share prices during Thursday’s trading session, following the company’s report of a net loss amounting to ₹6,196.24 crore for the quarter ending September. The steel giant also experienced a 7% year-on-year (YoY) drop in total revenue from operations, which stood at ₹55,681.93 crore for Q2FY24. Tata Steel’s share price commenced at ₹114.25 apiece on the BSE today.

Market expectations of a sharp decline in earnings for the FY24 quarter ending in July-September were met, primarily due to lower average selling prices (ASP) resulting from decreased ferrous prices and reduced seasonal demand. The entire steel industry grappled with mixed results in Q2FY24 due to these factors.

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Tata Steel Ltd. reported an unexpected net loss in the second quarter of fiscal 2024, attributed to one-time charges related to its U.K. operations. The Tata Group-owned steelmaker recorded a net loss of Rs 6,511.2 crore for the quarter ending September, significantly deviating from the Rs 440.7 crore profit consensus estimate by analysts tracked by Bloomberg. The loss was incurred due to impairment and restructuring costs exceeding Rs 6,000 crore in the U.K.

The majority of these impairment and restructuring costs are associated with the decarbonization project underway in the U.K. Tata Steel is investing £1.25 billion in collaboration with the U.K. government to establish a 3 million tonne electric arc furnace at its Port Talbot facility.

As of 1:44 pm, Tata Steel’s shares showed a slight recovery, trading 1.37% higher at ₹118.20.