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Informist, Saturday, May 16, 2026

By Astha Oriel and Ashustoh Pati

MUMBAI/NEW DELHI – The management of Tata Steel Ltd. Saturday said the letter from the Netherlands' environment agency and local province for an early closure of the coke and gas plants of its subsidiary Tata Steel Netherlands Ltd. is causing uncertainity in the subsidiary's operations profit-and-loss statement. The management was speaking in post earning analyst conference call after announcing the financial results for March quarter and the financial year 2025-26 (Apr-Mar). 

"The letter which had come in did not have any definitive pathway, dates or transition specifics. So, which actually, if you are an auditor or if you are even in the company, you will actually ensure that these specifics are necessary to get into the next level of planning and creating the investments, etc....And that actually creates the uncertainty. And that is what is being used in India," Koushik Chatterjee, executive director and chief financial officer said.

According to the management, the closure of coal and gas plants is unlikely to have any negative impact on the subsidiary's earnings before interest, tax, depreciation, and amortisation. "..every year in the last 18 years, the Netherlands business has been EBITDA positive and cash positive. It's debt free even today. So going forward, if the coke ovens close, we expect it to continue to be EBITDA positive, maybe making less EBITDA than we had hoped we would make. But it will always be EBITDA positive," the management said. 

The management expects the Netherlands business to continue operations without any financial support from India operations. The company anticipates to see some margin compression going forward, which it plans to take care. The higher steel prices in Europe will maintain the subsidiary's EBITDA at a positive level, according to the management. The management said the net steel realisations of the Netherlands business has increased by 80 euros in the ongoing quarter as compared to the March quarter. 

"The key question is the investments in the future and whether we have the social licence to operate for that..... Those decisions will be taken once we are comfortable that we have a social licence to operate for the future, as much as we are seeking one now," the management said. 

On a question regarding the cost of market purchase of coke after the closure of the plants, the management said the company was looking at options to supply from various sources including India. "On the cost penalty on buying of coke...given the fact that we are still assessing as far as the timing is concerned, there will be an impact because we will not have the gases in particular and the credits that go into coke making. But other than that, we are also looking at options to supply from various sources, which could also include India. We will have some time to plan for it. That's what our basic assumption is," a senior company official said. 

The company has announced consolidated capital expenditure of INR 200 billion for the financial year 2026-27 (Apr-Mar). The capital expenditure of Tata Steel India operations is INR 120 billion for FY27, the management said. For its India operations, the company expects net sales realisation to increase by INR 6,000 per tonne quarter-on-quarter in the ongoing quarter. The company is aiming to double its market share in target areas such as automotive, and oil and gas.

"We are more interested in market share in key segments, attractive segments. And we want to make sure that our market share in the segments that we target, or the attractive segments as we call it, is at least twice our overall market share," the management, adding that the company focus will be a lot more in downstream operations.

"We have the optionality to grow the upstream. Even with the existing sites between Kalinganagar, Meramandali, Neelachal, plus Jamshedpur at 11 million tonnes, we already have the optionality to grow to 45-50 million tonnes in India," according to the management. 

The management said the company needs to focus more on downtream business to grow it much faster. It expects the downstream business to be at least 50-60% of the company's total volume. "We've always had downstream. We are planning to grow it. The tubes business, which is now 1.2 million tonnes, we want to take it to about four million tonnes. The wires business is about 600,000 tonnes -700,000 tonnes. We want to take it to a million tonnes. The packaging business, actually, between Europe and India, we are one of the largest in the world. We want to double the India capacity. We plan to double the size of the colours business also in the next 12-24 months," the management said. 

The company said its iron ore production in India stood at 45 million tonnes in FY26. "The challenge always in iron ore is more about logistics and evacuating the material and when we have logistics constraints and the priorities on our own in-house consumption," a senior official said. 

According to the management, as part of its post 2030 strategy, the company will continue to participate in auctions but will be "prudent" on bidding. "We will not bid beyond what we think makes sense. And we will focus on the iron ore leases that are available closer to eastern India because most of our capacity is coming in east," the management said. 

"The second part of post-2030 strategy is what is evolving in Maharashtra for us. A plan for Maharashtra is also hinged on iron ore availability in Maharashtra. So that is the second part of the plan. The third part of the plan is of course to look at imports. We have already got a shipment from Canada. We have very high quality ore there," the management said. 

The company expects its operations to be EBITDA positive in the ongoing fiscal. The company expects the UK net sales realisations to be 80 pounds per tonne higher in the ongoing quarter, sequentially.

Amid the West Asia war, the company's upstream business was largely unaffected during the crisis, the management said. For the March quarter, the company reported a rise of nearly 125% on year in its consolidated net profit to INR 29.26 billion. The company's revenue from operations for the quarter rose over 12% on year to INR 626.87 billion. Tata Steel announced its March quarter earnings after market hours Friday. Its shares closed at INR 216.84 on the National Stock Exchange, down nearly 2% from Thursday.  End  

Edited by Akul Nishant Akhoury

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