*MNCL research: Tata steel Long Products ltd (TSLP) 4QFY22 results first cut: Price hikes fail to control RM cost inflation*
_Mcap: Rs 36bn | CMP: Rs800_
*Revenue:* Rs18bn; +16% yoy, +7% qoq; According to our calculations, sponge iron realisations have risen by ~Rs5000 qoq due to favorable market conditions but TSLP's saleable steel has failed to receive enough price hikes as compared to broad market. FY22 revenue: Rs68bn; +43% yoy
*Saleable steel:* Sales volume - 0.158mnt; -8% yoy; -4% qoq due to maintenance shutdown. FY22: 0.65mnt; +2% yoy
*Sponge iron:* Sales volume - 0.151mnt; -12% yoy ; +21% qoq; FY22: 0.59mnt; -6% yoy
*RM cost/tonne:* Rs36,218/tonne; +94% yoy; +5% qoq; due to Hike in coal and scrap cost and Rs1bn charge on the account of revised royalty.
*EBITDA:* Rs1.6bn. Margins came in at 9.1% (vs 32% yoy; 15% qoq). FY22 margins: 17.3% vs 23% yoy
*Adj. PAT:* Rs596mn; -82% yoy; -49% qoq; FY22: Rs6.5bn; +15% yoy
*Outlook: * We expect 1QFY23 performance to be equally poor due to further coal cost inflation. Acquisition of 93.7% stake in NINL is completed which should lend volume growth in FY23 depending on the turnaround of NINL assets.
Regards, Sahil Sanghvi @ Monarch Networth Capital Ltd.