Tata Steel Reports Positive Financial Performance in Q1 FY25, Receives 'Hold' Call from MarketsMOJO

Tata Steel, a leading iron and steel company in the largecap industry, has recently announced its financial results for the quarter ending June 2024. The company has received a ‘Hold’ call from MarketsMOJO, indicating a neutral stance on its stock.

According to the financials, Tata Steel has shown positive performance in the quarter, with a score of 14, an improvement from 13 in the previous quarter. The company’s Profit Before Tax (PBT) has grown by 103.8% to Rs 2,474.84 crore, compared to the average PBT of the previous four quarters at Rs 1,214.55 crore. This shows a very positive trend in the near term for PBT.

Tata Steel’s Operating Profit to Interest ratio has also improved, reaching the highest at 3.77 times in the last five quarters. This indicates the company’s ability to manage its interest payments is getting better. The Profit After Tax (PAT) has also shown a growth of 60.8% to Rs 1,097.94 crore, compared to the average PAT of the previous four quarters at Rs 682.60 crore. The company has been able to settle its debtors faster, with the Debtors Turnover Ratio reaching the highest at 36.29 times in the last five half-yearly periods.

The company’s Operating Profit (PBDIT) has also reached the highest at Rs 6,694.47 crore in the last five quarters, showing a positive trend in the near term. The Operating Profit Margin has also improved, reaching the highest at 12.22% in the last five quarters, indicating an increase in efficiency.

However, there are some areas that need improvement for Tata Steel. The Operating Cash Flow has fallen each year in the last three years, reaching the lowest at Rs 20,300.67 crore. The Net Sales have also shown a negative trend, reaching the lowest at Rs 54,771.39 crore in the last five quarters. The company’s Dividend Payout Ratio (DPR) has also been low at -101.20% in the last five years, indicating a lower distribution of profits as dividends.

Overall, Tata Steel has shown positive financial performance in the quarter ending June 2024, with improvements in key areas such as PBT, PAT, and Operating Profit. However, there are some areas that need attention for the company to maintain its growth trajectory. Investors are advised to hold their position in the stock, as recommended by MarketsMOJO.