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Steel prices in western markets rose sharply in the January-March period due to tight supply and recovering demand. Coking coal prices showed renewed volatility, with a sharp rise followed by a sharp fall. European electricity and energy costs remain high due to the ban on Russian coal imports. It is moderated when the supply of renewable energy increases.

The Indian business accounted for 62% of Tata Steel’s FY22 steel shipments at 18.27 million tonnes, a 6% annual increase. Tata Steel ended fiscal 2021-22 with a record operational and financial performance, with EBIDTA doubling and profit 5 times that of the previous year. Consolidated sales were £2,43,959 billion and EBIDTA was £63,830 billion, giving a 26% margin and an EBITDA per tonne of £21,626. “The cash outflow for the investments was Rs. 10,522 crore, well within our earlier forecast,” said Koushik Chatterjee, Tata Steel’s Executive Director and Chief Financial Officer.

Tata Steel generated strong free cash flow of £27,185 million for the year despite higher working capital, tax and capital spending. While the Indian business continued to perform strongly with an EBITDA margin of 39%, the European business generated its highest-ever EBITDA at £1,199 million (£12,164 billion) for the financial year.

The steelmaker repaid 15,232 crore in loans during the year. This reduced net debt to ₹51,049 crore. Net debt to EBIDTA has improved to 0.8x from 5.91 in March 2020. By March 2021, it had fallen to 2.44 times. Gross debt was 75,561 crore.

Cheryl Tenny

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