About the company:
Tata Steel is one of the world’s leading steel manufacturers and a flagship company of the Tata Group. Headquartered in Mumbai, India, it operates in over 26 countries with key production facilities in India, the UK, and Europe. The company produces a wide range of steel products, including flat and long steel, automotive steel, and construction materials. Tata Steel is known for its innovation, sustainability initiatives, and commitment to reducing carbon emissions through green steel production. It is one of the most cost-efficient steel producers globally and continues to expand its presence in domestic and international markets.
India Operations:
Steel production: 5.69 MTPA, up 6% YoY, supported by Kalinganagar’s new blast furnace.
Steel deliveries: 5.29 MTPA, up 8% YoY.
Automotive & Special Steel: Growth in high-end products and strong Tiscon (20% YoY growth).
Cost Reduction: Coking coal cost down ₹1,300 per ton, conversion cost down ₹1,678 per ton.
Cold Rolling Mill (CRM) Expansion: Continuous annealing line commissioned, galvanizing line to follow.
European Operations:
Netherlands:
Revenue impacted by low steel spreads (~€170 per ton, lowest in years).
Production at 1.75 MTPA hot metal, running at 7 MTPA annual rate.
Transformation program underway with multi-year cost takeouts.
UK:
Heavy asset closure led to a £80 per ton cost reduction.
EBITDA loss improved from -£147M in Q2 to -£67M in Q3.
Shift to Electric Arc Furnace (EAF) progressing, expected to enhance efficiency.
Strategic Developments & Outlook:
Demerger of Tata Steel UK & Netherlands progressing.
Kalinganagar ramp-up to increase production & reduce costs.
Sukinda mine closure to improve balance in ore sourcing.
EV demand & high-end steel to drive future growth.
UK expected to breakeven by Q1 FY26, Netherlands to improve from Q1 FY26.
Cost takeout programs across all geographies to enhance profitability.
Key Challenges & Market Trends:
Global steel prices remain under pressure, especially from China’s high exports (~111 MTPA in 2024).
India realisations flat QoQ, pending government trade actions.
UK & Netherlands pricing to drop in Q4 due to contract renewals.
Raw material cost expected to decline (coking coal by $10-20 per ton in Q4).
Here is a table summarizing Tata Steel’s financial performance over the last three quarters (Q1 FY25, Q2 FY25, and Q3 FY25):
| Financial Metrics | Q1 FY25 | Q2 FY25 | Q3 FY25 |
|---|---|---|---|
| Revenue (₹ Crores) | 59,490 | 55,682 | 53,648 |
| EBITDA (₹ Crores) | 6,122 | 5,499 | 5,994 (Adj. ₹7,155) |
| EBITDA Margin (%) | 10.3% | 9.9% | 11.2% |
| Net Profit (₹ Crores) | 525 | 1,029 | (Impacted by FX loss) |
| EBITDA per Ton (₹) | 7,854 | 7,152 | 9,263 |
| Net Debt (₹ Crores) | 67,500 | 66,000 | 63,000 |
| India Steel Production (MTPA) | 5.33 | 5.67 | 5.69 |
| India Steel Deliveries (MTPA) | 4.96 | 5.21 | 5.29 |
Recent updates:
Highlights from last con call:
Financial Performance:
Revenue: ₹53,648 crores, impacted by lower global steel prices.
EBITDA: ₹5,994 crores (excluding FX impact: ₹7,155 crores).
Net Profit: ₹1,100 crores FX revaluation loss affected bottom-line performance.
EBITDA per ton: ₹9,263 per ton, up 30% QoQ.
Net Debt: Reduced by ₹3,000 crores due to strong working capital management.