Despite the growing uncertainty, Tata Steel has managed to post better profit on back of better realisation. The company has announced capex of ₹33,873 crore over 4 years to expand capacity at Neelachal Ispat Nigam. TV Narendran, MD & CEO and Koushik Chatterjee, CFO Tata Steel spoke to businessline on company’s future outlook. Edited Excerpts:
What has driven your profitability in Q1?
TV Narendran: Our margins have become better in India and in UK compared to the previous quarter. In UK, the losses are lower. However, the volumes in Q4 were much higher than Q1. Despite the impact on volume in Q1, the positive impact on the margin resulted in better numbers. However, the cost has also gone up in the June quarter because coking coal prices went up by about $10 a tonne in all geographies. In India, prices went up by about ₹6,000 a tonne in Q1 compared to Q4. In UK it was about 80 pounds and in Netherlands it was about 70 euro and 90 pounds in UK. We are expecting the volumes missed in Q1 will come back in Q2.
Do you expect prices to come under pressure in Q2?
Yes. Prices inlong products is expected to come under pressure because construction activity slows down and that is reflected in rebar prices, which has dropped from the peak of April or May. It is about ₹7,000- ₹8,000 lower. However, there was no price drop in flat products.
