Tata Steel reported after-tax profit of Rs 7,162 crore on a consolidated basis in the fourth quarter of the last fiscal on the back of an unprecedented surge in steel prices and margins. It had posted a loss of Rs 1,615 crore during the same period in the previous year.

Turnover rose to Rs 49,997 crore on a consolidated basis in the fourth quarter from Rs 36,009 a year ago, an increase of 38.8 per cent even as deliveries of steel grew by 1.5 per cent on a like-to-like basis, indicating a jump in net sales realisation.

Tata Steel’s consolidated earnings before interest, tax, depreciation and amortisation (EBIDTA), an indicator of underlying performance, reached Rs 13,933 crore, the highest-ever in a quarter.

Despite the lockdown-related disruptions in the first quarter of the last fiscal, the steelmaker ended the year with a profit of Rs 8,190 crore, which was almost seven times more than the Rs 1,172-crore reported in the year before.

Taking advantage of the strong free cash flow generated by the business, which stood at Rs 23,748 crore, the company reduced net debt by Rs 29,390 crore. The net debt of Tata Steel Group is now Rs 75,389 crore against Rs 104,779 crore a year ago.

Koushik Chatterjee, executive director and CFO of the company, said the Tata Steel Group would reduce debt by another $1 billion and also increase capital allocation for the expansion of the Kalinganagar plant. The company announced a dividend of Rs 25 a share.

T.V. Narendran, managing director & CEO of Tata Steel Group, said the cold rolling mill and pellet plant would be completed in the next 12-18 months, which would further boost margins. “We have also restarted our 5-million-tonne expansion project which should be completed in FY24,” he added.

However, it is expecting to raise domestic steel production by a million tonnes during this fiscal by debottlenecking exercises. Tata Steel does not foresee a cut in production as a result of lower liquid oxygen supplies. The company did not rule out the possibility of raising exports if India demand slackens due to the pandemic.

The Indian operations once again underpinned the numbers even as Tata Steel Europe posted a positive EBIDTA in the fourth quarter. The company also decided to continue with the South East Asian operations and not put it up for sale.