Growth in India’s steel sector is expected to be stable despite challenges posed by the Russian-Ukrainian war or high inflation affecting input costs, said N Chandrasekaran, chairman of Tata Steel.
“Although there are risks of high input costs, growth in the Indian steel industry is expected to remain stable as domestic demand is expected to remain robust and global supply and demand dynamics could present opportunities for growth. export,” he said in the company’s 2021 annual report. -2022.
Tata Steel had a strong financial performance in the 2021-2022 financial year as steel prices remained strong. “We demonstrated extraordinary resilience, agility and adaptability, which allowed us to record the best Ebitda performance ever despite the continuing uncertainties. The business was able to accelerate restructuring, innovation and business growth,” he said.
During the financial year, Tata Steel achieved its highest ever consolidated Ebitda of Rs 63,830 crore, doubling its growth from last year, resulting in Ebitda per ton of Rs 21,626 and margin healthy EBITDA of 26%. The company generated free cash flow of Rs 27,185 crore and reduced its net debt by 32% to Rs 51,049 crore during the year.
Building on this strong performance, the company announced its highest ever dividend payout of 510% per share as the board recommended a dividend of Rs 51 per fully paid share and Rs 12.75 per share partially released. the company. The board of directors has also recommended a subdivision of the capital shares in the ratio of 10:1.
However, Chandrasekaran observed that the ongoing geopolitical conflict, the reimposition of the lockdown in China due to new Covid-19 cases, global inflation and continued supply shortages are expected to negatively impact global GDP growth. in 2022. The war in Ukraine has triggered another crisis which has brought many other challenges in the form of strained geopolitical and trade relations, he added.
“The World Bank expects global growth to decelerate from around 5.5% to 3.2%. Commodity and energy prices are expected to remain high following the conflict and sanctions, leading to higher global inflation,” he said.
Meanwhile, Tata Steel continued to accelerate its investment allocation for the 6 million tonne (mt) pellet plant to be commissioned in the third quarter of FY23, followed by the rolling mill complex at cooling capacity of 2.2 mtpa, as well as the expansion of 5 mtpa in Kalinganagar, which will generate cost savings and enrich the product range.
Highlighting that the company has made progress in new materials, Chandrasekaran said the company is exploring composites, graphene and advanced ceramics as growth areas. “Tata Steel aims to grow its business in knowledge- and IP-intensive and non-cyclic new materials. During the year, the company, through its subsidiary, began work on building a world-class facility to produce healthcare-focused medical equipment,” he said. declared.
During the year, the company achieved a full separation of its UK and Netherlands operations in October 2021. Under the new structure, Tata Steel UK and Tata Steel Netherlands will operate as two independent companies pursuing distinct strategic paths.
He said Tata Steel will continue to invest significantly in new technologies for digital transformation. “The pandemic has acted as a catalyst to accelerate our digital transformation efforts in various spheres of our business. To that end, this year we piloted the digitization of our factories by creating “digital twins”, a simulated digital replica of factories through real-time data analytics, opening up possibilities for “smart factories”. ‘data-driven in the future,’ he said. said.