>TATA STEEL (MOTILAL OSWAL)

■ Tata Steel‘s standalone 3QFY10 adjusted PAT grew 98% YoY to Rs11.8b (v/s est. of Rs11.5b). Reported PAT of Rs11.9b included Rs1.7b of gain on the sale of investments (accounted in other income) and Rs1.5b of net loss primarily due to a swap of CARS (accounted in other expenditure).

■ Net sales increased 12% QoQ to Rs63.8b due to a 10% sales tonnage increase to 1.6mt and a 2.5% increase in realizations to Rs36,534/ton. Sales tonnage during December jumped exceptionally due to strong apparent demand at the end of destocking. Revenues from the steel segment grew 31% YoY to Rs58.3b. Revenues of ferro alloys (FAMD) increased 39% to Rs5.2b.

■ EBITDA increased 20% QoQ to Rs23.1b (v/s est. of Rs23b). EBIT of FAMD grew 59% QoQ (down 21% YoY) to Rs1.1b. EBITDA per ton of saleable steel increased by Rs1,061 QoQ to Rs13,725/ton due to an increase in realization and expected decline of raw material costs due to lower coking coal costs. However, staff costs were sequentially higher by Rs1.3b.

■ Tata Steel India is expected to see 10% volume growth in FY11 due to a ramp up of existing capacity. FY12 volume growth will be driven by brownfield expansion to 10mtpa. Corus’ operations are expected to turn around due to a reduction in coking coal costs and buoyancy in steel prices. The Teesside plant’s future remains uncertain due to political pressure. Corus has announced a price increase of GBP60/ton on long products.

To read the full report: TISCO