Tata Steel will report its quarterly numbers on Tuesday, and the Street expects a positive surprise. CNBC-TV18 estimates the top line to grow at around 33.5 percent to Rs 66,706 crore for the fourth quarter of 2021-22 and operating profit to jump up by 14 percent to Rs 16,200 crore driven by sales volume growth from India operations.

The strong performance by Tata Steel Europe was offset by a fall in the margin in domestic operations. So, analysts expect margins to see a compression of close to around 400 basis points, from 28.4 percent to 24.5 percent. Profit after tax is expected to go up 38 percent to Rs 9,883 crore.

On Monday, Tata Steel extended gains, trading at day's high, up more than 2 percent.

What are the factors at play?

The management expects realisations across geographies – India, Europe, or Southeast Asia – to be much higher. The volume growth will be led by the Indian business, and the European business is the one that will drive profitability.

On a per tonne basis, the India business will see a bit of a downtick. According to analysts, deleveraging is the kicker for market capitalisation, so the Street is likely to watch that.

For the India operations, volumes are close to around 10 percent odd. Sales are higher than the production, indicating no inventory build-up. Also, the demand has been good, and export markets have opened up. The crucial number is the India business EBITDA per tonne, which is gradually coming lower, and this time around poll expects it to be around Rs 24,800 per tonne.

Tata Steel Europe volumes are down by close to around 4 percent. Due to higher steel prices, spreads have improved, though coking coal costs will hurt India and the European operations. Europe's EBITDA per tonne is estimated to be $198 per tonne for the quarter under review.

Here is a look at how Tata Steel did in the third quarter of 2021-22. Tata Steel's third-quarter consolidated net profit came in at Rs 3,989 crore versus CNBC-TV18 poll of Rs 3,408 crore and versus loss of Rs 1,166 crore year-on-year.

Management commentary on demand, pricing and debt reduction and how they plan on turning around Neelachal Ispat Nigam Limited will be crucial.

First Published:May 2, 2022 5:08 PM IST