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Informist, Thursday, Feb. 5, 2026

 

By Astha Oriel

 

MUMBAI - Tata Steel Ltd. is likely to see a sharp year-on-year rise in its consolidated bottom line for the December quarter owing to an improvement in operating margin, increase in its India business volume, and the narrowing loss in its business in the Netherlands, according to brokerages tracking the company. Tata Steel's consolidated December quarter top line is expected to rise only marginally.

 

The company's net profit is expected to be INR 24.32 billion, up 437% on year but down nearly 31% on quarter, according to the average of estimates from 12 broking firms. Its net profit for the year-ago quarter was INR 4.53 billion, excluding an exceptional cost of INR 1.26 billion. The highest estimate for net profit is INR 27.55 billion from YES Securities (India) Ltd. and the lowest is INR 22.47 billion from Nuvama Wealth Management Ltd. This is likely to be the fourth consecutive quarter of a year-on-year rise in the company's net profit.

 

The steel major's revenue from operations for the December quarter is likely to be INR 577.12 billion, up nearly 8% on year but down nearly 2% on quarter, according to the average of estimates. The company's net revenue for the corresponding period a year ago was INR 536.48 billion. The highest estimate for net sales is INR 598.23 billion from Emkay Global Financial Services Ltd. and the lowest is INR 543.64 billion from Nuvama.

 

The company's volumes in the December quarter are expected to be between 8.2 million and 8.3 million tonnes, according to four estimates. Nomura Equity Research and Motilal Oswal Financial Services see the company's volumes at 8.2 million tonnes while ICICI Securities Ltd. and Systematix Shares and Stocks (India) Ltd. see them at 8.3 million tonnes. A year ago, the steelmaker's volumes were 7.77 million tonnes. "Higher volumes at Indian operations and narrowing losses at TSN (Tata Steel Netherlands) to drive 380 bps YoY margin expansion; volumes to mitigate pricing headwinds," Systematix said.

 

Motilal Oswal said Tata Steel's domestic business is expected to continue its strong performance and an improvement in the European business is likely to support overall earnings. "Better volumes are expected to offset the impact of weak net sales realisations," the brokerage said. Motilal Oswal expects earnings from the European business to remain moderate because of seasonal weakness.

 

The company's earnings before interest, tax, depreciation, and amortisation are expected to be INR 80.41 billion, up more than 34% on year but down nearly 12% on quarter, according to the average of 12 estimates. The company's EBITDA a year ago was INR 59.94 billion. The highest estimate for EBITDA is INR 85.80 billion from Systematix and the lowest estimate is INR 76.38 billion from IDBI Capital Market Services Ltd.

 

Systematix, IDBI Capital, and Nomura expect the company's December quarter EBITDA margin to be between 13.7% and 14.8%. The company's EBITDA margin a year ago was 11%.

 

The EBITDA per tonne is expected to be between INR 9,258 and INR 9,862, according to five estimates. The highest estimate for EBITDA per tonne is from Motilal Oswal whereas the lowest is from IDBI Capital. The company's EBITDA per tonne in the year-ago quarter was INR 9,263.

 

Analysts will focus on the management's commentary on the carbon border adjustment mechanism for the Europe business, import quota cut, and guidance on volumes, average selling price, and capital expenditure. The company will announce its December quarter earnings Friday. Thursday, shares of Tata Steel closed 1.2% higher at INR 197.76 on the National Stock Exchange. The stock has risen over 13% since the company reported its September quarter earnings.

 

Of the 12 brokerage reports on the company available with Informist, 10 have a "buy" recommendation on the stock with an average target price of INR 204, nearly 6% higher than the current market price. Two brokerages have a "hold" call on the stock with an average target price of INR 176.

 

Following are the estimates for Tata Steel's December quarter earnings, in INR billion, from 12 brokerage firms in descending order of the net profit estimate:

 

Brokerage	Net Sales	Net Profit	EBITDA
YES Securities (India) Ltd.	582.20	27.55	81.74
ICICI Securities Ltd.	582.30	25.58	80.39
Prabhudas Lilladher Pvt. Ltd.	597.00	25.30	82.20
Systematix Shares and Stocks (India) Ltd.	581.80	25.20	85.80
Elara Securities (India) Pvt. Ltd.	582.47	24.73	80.92
Motilal Oswal Financial Services Ltd.	587.68	24.09	80,76
JM Financial Institutional Securities Pvt. Ltd.	561.00	24.00	80.00
Nomura Equity Research	560.53	23.71	78.28
Kotak Securities Ltd.	591.09	23.22	80.22
Emkay Global Financial Services Ltd.	598.23	23.07	77.17
IDBI Capital Market Services Ltd.	557.53	22.91	76.38
Nuvama Wealth Management Ltd.	543.64	22.47	81.10
Average	577.12	24.32	80.41

 

End

 

Edited by Rajeev Pai

 

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