Demand for steel in India is expected to remain robust over the current fiscal year with consumption growing in double digits on the back of infrastructure development, rapid urbanisation and supportive policy reforms, Tata Steel’s Chairman, Natarajan Chandrasekaran said at an Annual General Meeting of the company.
“The Fiscal Year (FY) 22-23 witnessed some intense geo-political and economic volatility. This in turn has created constant disruptions in the global supply chains creating a bottleneck, with the global steel industry experiencing a ripple effect. “The global steel industry was also impacted by this volatility in the global environment, which affected the steel demand-supply balance and resulted in volatility in steel prices,” said Chandrasekaran.
He added India remains to be an exception in the global steel arena, primarily owing to robust government spending and vibrant consumption. “India’s steel consumption grew by over 10% Y-o-Y to 117 million tons in FY2022-23. Given the current stage of development of the Indian economy and the focus on infrastructure development, steel demand growth in India is expected to keep pace with the GDP growth over the next decade,” he added.
The company, which underwent a bad fiscal year in terms of profits, expects demand from key steel-consuming sectors such as construction, capital goods, railways, and automotive to remain robust. During FY2022-23, the company’s consolidated revenues stood at ₹2,43,353 crore, a 0.24% decrease Y-o-Y, while the consolidated Profit after Tax (PAT) for FY 2022-23 stood at ₹8,075 crore, a significant 80.65% decrease Y-o-Y.
The company attributes this significant fall in profits to the increase in raw material costs, which increased by 40% per ton, lower steel price realisation. On this decline, Chandrasekaran further added, “This decline in steel realisations was due to a decrease in demand and implementation of export duty on steel in India during the year.”
The Central Government restored the status quo in November last year and withdrew the export duty on steel products and iron ore, prompting a better final Quarter for the company.
On the growth front, the company continued to make progress towards augmenting the capacities across multiple sites, aligned with the objective of achieving 40 MTPA (Million Tonnes per annum) capacity by the year 2030, incurring a capital expenditure bill of ₹ 14,142 crore over the year.
Their acquisition of Neelachal Ispat Nigam Limited (NINL) has steadily ramped up during the last two quarters, operating with a run rate of 1 MTPA, while work on 5 MTPA expansion at Kalinganagar and setting up mill of 0.75 MTPA in Punjab is progressing.
