Tata Steel's India production volumes rose 4.65% to 4.5 million tons while the sales volumes fell 4.17% to 4.14 million tons in Q2 September 2019 over Q2 September 2018.

The steel maker said that Tata Steel India's Q2 sales volume increased by 5% QoQ on provisional basis primarily with better volumes at Tata Steel BSL. During the quarter, lower volumes to automotive segment were compensated by higher exports while deliveries in branded products & retail segment and industrial product & projects segment were maintained.

Tata Steel India's crude steel production was flat on QoQ basis.

Tata Steel's Europe production volumes rose 1.65% to 2.46 million tons while the sales volumes rose 0.44% to 2.28 million tons in Q2 September 2019 over Q2 September 2018.

Tata Steel Europe's Q2 FY20 production volume was lower primarily with adjustments related to weaker market conditions, planned summer shutdowns and unplanned outages; sales volume was flattish on QoQ basis.

Tata Steel's South East Asia production volumes rose 5.56% to 0.57 million tons while the sales volumes fell 6.15% to 0.61 million tons in Q2 September 2019 over Q2 September 2018.

The announcement was made after market hours yesterday, 10 October 2019.

Meanwhile, the S&P BSE Sensex was up 395 points or 1.04% to 38275.82.

On the BSE, 2.24 lakh shares were traded in the counter so far compared with average daily volumes of 7.31 lakh shares in the past two weeks. The stock hit a high of Rs 342.5 and a low of Rs 333.25 so far during the day.

The stock hit a 52-week high of Rs 610 on 14 Nov 2018. The stock hit a 52-week low of Rs 320.3 on 09 Oct 2019.

On a consolidated basis, the steel maker's net profit declined 65.9% to 704.46 crore on a 0.8% rise in the net sales to Rs 35382.16 in Q1 June 2019 over Q1 June 2018.

Tata Steel Group is among the top global steel companies with an annual crude steel capacity of 33 million tonnes per annum (MnTPA). It is one of the world's most geographically-diversified steel producers, with operations and commercial presence across the world.

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Tata Steel Ltd gained 2.08% today to trade at Rs 336.55. The S&P BSE Metal index is up 1.25% to quote at 8602.06. The index is down 4.21 % over last one month. Among the other constituents of the index, Steel Authority of India Ltd increased 1.57% and Jindal Steel & Power Ltd added 1.36% on the day. The S&P BSE Metal index went down 31.76 % over last one year compared to the 11.91% surge in benchmark SENSEX.

Tata Steel Ltd has lost 8.32% over last one month compared to 4.21% fall in S&P BSE Metal index and 2.09% rise in the SENSEX. On the BSE, 13641 shares were traded in the counter so far compared with average daily volumes of 8.66 lakh shares in the past one month. The stock hit a record high of Rs 610 on 14 Nov 2018. The stock hit a 52-week low of Rs 320.3 on 09 Oct 2019.

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Global business confidence remained subdued during 2QFY20 as weakening economic activities andprolonged uncertainty over trade conflicts impacted investment decisions and trade flows. Theaccommodative monetary policy stance by key advanced and emerging market economies is yet to show anynoteworthy impact on economic activity levels. Consequently, apparent steel demand remained weak,weighing on steel prices across geographies. Though the regional spot steel spreads have begun improvingsince mid-July'19 from the lows of 1QFY20 with softening coking coal and iron ore prices, the meaningfulbenefit will flow through in the next few quarters. In Europe, the steel industry continued to face significantheadwinds amidst lower demand conditions due to Brexit uncertainty and trade conflicts.

During the quarter, overall economy activities in India further weakened as reflected in low investmentsentiment and demand slowdown as is evident in plummeting vehicle sales and weak GST collections; Thiscombined with a seasonally weaker monsoon quarter adversely affected overall demand for steel. The Indiangovernment has announced various measures to stimulate economic activities and market sentiments,however the benefits of the same in terms of new private investments and improved domestic consumptionwill potentially manifest only in the longer term. The recent rate cuts by the Reserve Bank of India are awelcome step to improve liquidity though transmission of the rate cuts is not evident and hence the credit offtakehas not yet picked up. However, as the monsoon season comes to an end and the festive season starts,an improvement in sentiment is expected to trigger a pick-up in consumption and thus, steel demand.

In this environment:

-- Tata Steel India's 2QFY20 sales volume increased by 5%QoQ primarily with better volumes at TSBSL.During the quarter, lower volumes to Automotive segment were compensated by higher exports whiledeliveries in Branded Products & Retail segment and Industrial Product & Projects segment weremaintained. Tata Steel India's Crude Steel production was flat on QoQ basis.

-- Tata Steel Europe's 2QFY20 production volume was lower primarily with adjustments related to weakermarket conditions, planned summer shutdowns and unplanned outages; sales volume was flattish onQoQ basis.

Tata Steel Production Volume¹:

Tata Steel India production in 2QFY20 stood at 4.50 million tonnes (provisional) compared to 4.50 million tonnes in 1QFY20 and 4.30 million tonnes in 2QFY19.

Tata Steel Europe production in 2QFY20 stood at 2.46 million tonnes (provisional) compared to 2.65 million tonnes in 1QFY20 and 2.42 million tonnes in 2QFY19.

Tata Steel South East Asia production in 2QFY20 stood at 0.57 million tonnes (provisional) compared to 0.58 million tonnes in 1QFY20 and 0.54 million tonnes in 2QFY19.

1. Production Numbers: India - Crude Steel Production; Europe - Liquid Steel Production; South-East Asia - SaleableSteel Production.

Tata Steel Sales Volume²:

Tata Steel India sales volume in 2QFY20 stood at 4.14 million tonnes (provisional) compared to 3.96 million tonnes in 1QFY20 and 4.32 million tonnes in 2QFY19.

Tata Steel Europe sales volume in 2QFY20 stood at 2.28 million tonnes (provisional) compared to 2.26 million tonnes in 1QFY20 and 2.27 million tonnes in 2QFY19.

Tata Steel South East Asia sales volume in 2QFY20 stood at 0.61 million tonnes (provisional) compared to 0.62 million tonnes in 1QFY20 and 0.65 million tonnes in 2QFY19.

2. Figures for Tata Steel India includes Tata Steel Standalone, Tata Steel BSL (from 18 May 2018) and TataSteel Long Products (from 09 April 2019) without eliminating inter-company transactions.

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Tata Steel Ltd is up for a third straight session today. The stock is quoting at Rs 348.65, up 1.01% on the day as on 12:54 IST on the NSE. The benchmark NIFTY is up around 0.68% on the day, quoting at 10921.15. The Sensex is at 36909.96, up 0.72%. Tata Steel Ltd has slipped around 8.71% in last one month.

Meanwhile, Nifty Metal index of which Tata Steel Ltd is a constituent, has slipped around 2.68% in last one month and is currently quoting at 2313.6, up 0.51% on the day. The volume in the stock stood at 52.89 lakh shares today, compared to the daily average of 144.15 lakh shares in last one month.

The benchmark September futures contract for the stock is quoting at Rs 349.25, up 0.88% on the day. Tata Steel Ltd is down 43.69% in last one year as compared to a 5.76% slide in NIFTY and a 37.15% slide in the Nifty Metal index.

The PE of the stock is 4.03 based on TTM earnings ending June 19.

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