Tata Steel has posted a consolidated loss of Rs 2,127 crore in third quarter (Q3) ended December 31, 2015 against a profit of Rs 157.11 crore reported for the year ago period, the company informed BSE on February 4.
The bottom line was way below compared to expectations made by the analysts. The analysts forecasted that the loss would be Rs 1,000-1,103 crore because of lower steel price and weak demand all over the world.
Although the income from operation was slightly down by 16.63% to Rs 28,039 crore in Q3 of 2015-16 from Rs 33,633 crore in Q3 of 2014-15, the EBITDA came down sharply to Rs 838 crore from Rs 3,090 crore during the same period.
Industry experts explained that the loss was incurred because of lower realisations of revenue and restructuring done at the European operations including employee separation compensation charges.
TV Narendran, Managing Director of Tata Steel, India and South East Asia, said, “Steel markets in India have been affected by depressed international steel prices and predatory imports. Tepid demand among steel consuming sectors has further exacerbated the problem. Despite all these challenges, we continue to operate at full capacity and delivered 10.3% volume growth over last year. However, the quarter saw a sharp decline in steel prices which has impacted our margins.”