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Informist, Wednesday, Nov. 5, 2025

 

By Rajesh Gajra

 

NEW DELHI - Tata Steel Ltd. is likely to report strong earnings and operating profit numbers for the September quarter on the back of a strong rise in steel delivery volumes from its India factories, a moderate increase in volumes from its European operations, and narrowing losses in its Netherlands operations. The net realisation from domestic sales, however, is expected to decline year-on-year by low single digit.

 

In early October, Tata Steel had a reported delivery volume of 5.56 million tonnes from its Indian factories for the September quarter, which was up 8.8% from 5.11 million tonnes a year ago. The production volume had also increased 7.4% on year to 5.67 million tonnes during the latest quarter.

 

The steel major is expected to report a 3.4 times jump on year and a 25% rise on quarter in its consolidated net profit at INR 27.7 billion for the September quarter, according to the average of estimates of 11 brokerages. Estimates for the company's September quarter net profit range from a low of INR 20.8 billion by IDBI Capital Market Services to a high of INR 32 billion by JM Financial Institutional Securities.

 

The company's consolidated revenue is likely to be INR 555.4 billion, up 3% on year and 4.4% on quarter. The lowest revenue estimate is INR 531.8 billion by IDBI Capital and the highest is INR 582.8 billion by ICICI Securities.

 

The "higher volumes at Indian operations and narrowing losses at TSN (Tata Steel Netherlands)" will likely drive margin expansion of 285 basis points on year, Systematix Shares and Stocks (India) said. Sequentially, Tata Steel is expected to post a 5% revenue decline due to seasonality and net sales realisation contraction, IDBI Capital said. A seasonal decline in steel prices is likely to cause Tata Steel's standalone steel realisations to decline 4.5% on quarter and 1.6% on year, according to Kotak Securities.

 

The company is seen posting earnings before interest, tax, depreciation, and amortisation of INR 80.5 billion for the September quarter, according to the average of the estimates of 10 brokerages. Tata Steel's EBITDA per tonne in India will likely decrease 3.6% on year but rise 20% on year to INR 14,407 "led by lower realisations, partially offset by lower costs," Kotak Securities said. It expects the company's consolidated EBITDA to rise 50% on year.

 

Estimates for Tata Steel's consolidated EBITDA growth for the September vary. Emkay Global Financial Services expects the company's consolidated EBITDA to rise 35% on year, while Kotak Securities expects the growth to be higher at 50%. Systematix Shares and Stocks projects the company's EBITDA growth at 34% on year. Brokerage Motilal Oswal, which estimates Tata Steel's consolidated EBITDA growth at 54% on year, said it expects Tata Steel Europe to "post positive EBITDA in 2QFY26 (September quarter), led by cost-saving."

 

"While (Tata Steel's) domestic realizations may have softened, lower coking coal prices and higher volumes are expected to provide meaningful margin relief," for the September quarter, YES Securities said in a report. Systematix expects the company's EBITDA to benefit sequentially from "cost take-outs and (improvement in) Netherlands operations."

 

The company's bottom line growth will be largely on the back of EBITDA growth. Interest costs and depreciation expenses are expected to be flat or rise moderately, boosting the net profit growth, according to brokerage Motilal Oswal. Tata Steel will detail its September quarter earnings on Nov. 12. Investors will watch for commentary on the cash flow and profitability of European operations, and an update on capacity expansion progress and guidance for the coming quarters, according to IDBI Capital.

 

On Tuesday, shares of Tata Steel closed at INR 179.29 on the National Stock Exchange. The stock is up around 13% sice the company's June quarter earnings announcement on Jul. 30. Of the 16 brokerage reports on the company available with Informist, 12 have a 'buy' call at an average target price of INR 184, and four have a 'hold' recommendation.

 

In the June quarter, the company had reported a 2.2 times jump in its consolidated net profit at INR 20.8 billion, despite the consolidated revenue from operations declining 2.9% on year to INR 531.8 billion. Adjusted for exceptional gains, the consolidated net profit of Tata Steel had risen 68% on year to INR 22.1 billion in that quarter.

 

Following are the September quarter earnings estimates for Tata Steel from 11 broking firms in the descending order of estimate of net profit in INR million:

 

Brokerage	Net sales	Net profit	EBITDA
JM Financial Institutional Securities Pvt. Ltd.	548,000	32,000	86,000
Anand Rathi Share and Stock Brokers Ltd.	551,032	31,803	--
Nuvama Wealth Management Ltd.	532,193	31,117	85,374
Kotak Securities Ltd.	547,832	30,021	85,456
ICICI Securities Ltd.	582,775	29,376	82,901
Emkay Global Financial Services Ltd.	554,980	28,445	83,942
Prabhudas Lilladher Pvt. Ltd.	578,300	28,400	86,500
Motilal Oswal Financial Services Ltd.	568,006	27,733	85,139
Systematix Shares and Stocks (India) Ltd.	576,400	23,800	61,400
YES Securities (India) Ltd.	538,019	20,951	73,952
IDBI Capital Market Services Ltd.	531,781	20,777	74,275
Average	555,393	27,675	80,494

 

End

 

Edited by Avishek Dutta

 

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