Tata Steel doesn’t want growth at cost of debt: CFO Koushik Chatterjee
Tata Steel’s growth will not come at the cost of debt but will instead be a balance between the company’s internal accruals and deleveraging, chief financial officer Koushik Chatterjee said, even as the steelmaker projected a six-month delay in achieving breakeven in its UK operations.
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The UK business is now expected to break even in the first two quarters of the next financial year against an earlier expectation of the second half of the current fiscal year.
“Our capital allocation is very clear that we will not want to have the growth at the cost of debt,” he told analysts on Tuesday, adding that the company intends to bring down its net debt to Ebitda ratio to below 3.0 from 3.3 currently.
Excessive exports of steel from China at sharp discounts have hurt the price of the alloy across the globe. This, in turn, has impacted the profitability of Indian producers, most of whom are in the midst of expanding their production capacities.
A series of measures to cut costs and bring in operational efficiencies across geographies, though, will help combat the subdued market conditions, Chatterjee said. These include better inventory management, improved terms for credit and optimising blends.
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