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Informist, Thursday, Nov. 13, 2025

 

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--Tata Steel: Average India steel prices, realisations fell QoQ in Jul-Sept
--CONTEXT:Comments by Tata Steel's management in post-earnings investor call
--Tata Steel: Co's cost transformation program aided EBITDA margin in Q2
--Tata Steel:Tata Steel UK EBITDA loss widened QoQ in Q2 amid weak steel mkt
--Tata Steel: UK remains vulnerable market, saw cheap imports
--Tata Steel: Difficult to say if UK EBITDA will turn positive by Q4
--Tata Steel: India product mix getting richer, to aid volumes going ahead
--Tata Steel: Looking at downstream capacity expansion for value growth
--Tata Steel: To pace India capacity expansion with demand, profitability
--Tata Steel: India steel prices for co not seen increase in Oct-Nov
--Tata Steel: Not factored in major India steel price increase for Dec
--Tata Steel: Demand for quality steel boosting Thailand ops profitability

 

By Rajesh Gajra and Afra Abubacker

 

NEW DELHI – It is difficult for Tata Steel Ltd.'s UK operations to report positive earnings before interest, tax, depreciation, and amortisation within the next couple of quarters owing to the unsustainable prices at which steel is currently trading in the UK with imports, the company's management said Thursday in a post-earnings investor call. The UK steel market remains "very vulnerable... as the import quotas of steel across several product grades are higher than the total consumption of the country, making it very open to cheap imports", a top official said.

 

This was a key factor in Tata Steel UK's EBITDA loss widening sequentially in the September quarter, the management said. The company's UK EBITDA loss for the quarter was INR 7.7 billion, higher than INR 4.7 billion for the June quarter but lower than the loss of INR 15.9 billion a year ago, according to the company's earnings investor presentation. Tata Steel UK's revenue from operations also declined to INR 59.3 billion from INR 61.0 billion for the trailing quarter.

 

The company is "comfortable with the current capacity level" in the UK, according to the official. "There's nothing wrong with the (UK) capacity in the context of the demand. It is the issue of imports that has come in," he said.

 

On its Netherlands operations, Tata Steel's management said the revenue performance for the September quarter was aided by improved volumes but partly offset by lower realisations. Material costs increased sequentially, "largely due to inventory drawdown in contrast to the build-up in the first quarter (Apr-Jun)", it said. The company expects "softer margins" and "maybe some margin compression" from its operations in the Netherlands in the December quarter due to "pressure on prices", the official said.

 

In Tata Steel's India operations, steel prices and realisations were down sequentially in the September quarter, according to the management. Steel prices have not gone up so far in Oct-Nov and the company has not factored in any major increase for December, it said.

 

The product mix in the India operations is getting richer and this will help volume growth going ahead, a top official said. The company is looking at value growth through downstream capacity expansion for its India operations, he said. But the pace of any India capacity expansion will be linked to demand growth and profitability, he added.

 

The management said the company's EBITDA margin expanded by 280 basis points in Apr-Sept, "reflecting our continued focus on the India growth volumes, cost competitiveness, and ... on cash flows". Tata Steel's targeted cost transformation programme across geographies aided the margin expansion in Apr-Sept, with INR 54.5 billion achieved during the period, the management said. This translated to about 94% compliance with the company's plan for the first half of the current financial year, it said.

 

For the September quarter, in India operations, "the cost transformation programme achieved full compliance to our second quarter plan with a leaner coal mix, optimisation on the stores, repairs, and maintenance expenses... which delivered the transformation of about 1,036 crores (INR 10.36 billion) for the quarter," a top official said. "Across geographies, we remain focused on execution of the cost transformation targets for the full year," he added.

 

On the company's Nov. 4 announcement of a sell-off, within three months, of the assets of its ferro alloy plant at Jajpur in Odisha to Indian Metals & Ferro Alloys Ltd., the management said the decision was linked to its Sukinda mine. It said Sukinda needs underground mining to sustain itself and that would have entailed high capital expenditure. The business was not as attractive as it was before and the decision to sell it off was "more a rethink on this portfolio given the current context", the management said.

 

Tata Steel Wednesday reported its September quarter earnings. The company's consolidated net profit rose 3.7 times on year to INR 31 billion. Its consolidated net revenue from operations was up 8.8% on year at INR 582.2 billion. Thursday, the company's shares ended at INR 176.65, down 1.1%, on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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