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View Promises →Tata Steel Limited — Q2 FY25
Tata Steel's Q2 FY25 consolidated revenue stood at INR 53,905 crore with EBITDA of INR 6,224 crore, yielding a 12% EBITDA margin, up 300 bps YoY.
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Tata Steel's Q2 FY25 consolidated revenue stood at INR 53,905 crore with EBITDA of INR 6,224 crore, yielding a 12% EBITDA margin, up 300 bps YoY. India standalone EBITDA margin was 21% (INR 13,176/ton), driven by cost improvements and higher volumes. The Kalinganagar expansion is ramping up, with the new blast furnace producing 7,500 tons/day, targeting 15,000 by Q4. However, the UK segment posted a widened EBITDA loss of GBP 147 million due to transition costs, while Netherlands EBITDA fell to GBP 22 million amid weak European demand. Management expects UK breakeven by June 2025 via fixed cost reductions of GBP 100/ton. Key risks include sustained Chinese steel exports pressuring global prices and the unresolved ORISED tax matter in India.
टाटा स्टील की दूसरी तिमाही में कुल कमाई ₹53,905 करोड़ रही। कंपनी ने ₹6,224 करोड़ का EBITDA कमाया, यानी 12% EBITDA मार्जिन, जो पिछले साल से 3% ज्यादा है। भारत में EBITDA मार्जिन 21% (₹13,176 प्रति टन) रहा, जो लागत घटने और ज्यादा बिक्री से हुआ। कलिंगनगर का नया ब्लास्ट फर्नेस अब 7,500 टन/दिन उत्पादन कर रहा है, मार्च तक 15,000 टन का लक्ष्य है। लेकिन UK में घाटा बढ़कर £147 मिलियन हो गया, जबकि नीदरलैंड में कमजोर मांग से EBITDA £22 मिलियन रहा। कंपनी जून 2025 तक UK में लागत घटाकर बराबरी पर आना चाहती है। चीन के स्टील निर्यात और ORISED टैक्स विवाद जोखिम हैं।
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Sustained Chinese steel exports pressuring global prices
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Read Transcript →Quarter Snapshot
India crude steel production
5.3M tons
+5% YoY
Crude steel production in India grew 5% year-on-year to 5.3 million tons in Q2.
India domestic deliveries growth
5.1M tons
+6% YoY
Domestic deliveries rose 6% YoY to 5.1 million tons, aided by growth across business verticals.
Tata Tiscon retail sales growth
20% YoY
+20% YoY
Retail brand Tata Tiscon saw 20% YoY growth driven by enhanced reach and consumer connect programs.
Kalinganagar blast furnace daily output
7,500 tons/day
Ramping to 15,000 tons/day by Q4
The new blast furnace at Kalinganagar is operating at 7,500 tons/day, targeting 15,000 tons/day by Q4 FY25.
What Changed vs Last Quarter
NEW
UK EBITDA breakeven target by June 2025
Management targets achieving neutral to positive EBITDA in the UK by June 2025, driven by fixed cost reductions of GBP 100 per ton.
NEW
Kalinganagar blast furnace to reach 15,000 tons/day by Q4 FY25
The new blast furnace at Kalinganagar is expected to ramp up to 15,000 tons per day by the fourth quarter of FY25.
NEW
FY26 CapEx to be significantly lower than FY25
Capital expenditure in FY26 is expected to decline substantially as Kalinganagar Phase 2 completes, with no major new projects starting.
UPDATED
India net realizations expected INR 2,000/ton lower in Q3 vs Q2
Net realizations in India are expected to decline by about INR 2,000 per ton in Q3 compared to Q2, due to lower July prices and auto contract adjustments.
DROPPED
India volume guidance of 1.4 million tons incremental for FY25
Full-year incremental volume from Kalinganagar expansion is guided at 1.4 million tons, as G Blast Furnace relining in Q4 offsets some gains.
DROPPED
UK EBITDA to break even from Q3 FY25
Management expects UK operations to reach close to breakeven or slightly positive EBITDA from Q3 FY25, after closure of second blast furnace in September.
NEW RISK
UK restructuring costs and timeline uncertainty
The UK restructuring involves GBP 150-160 million in redundancy costs, with cash outflows spread over Q3, Q4, and Q1 next year, posing execution risk.
NEW RISK
ORISED tax liability uncertainty
The ORISED Act tax matter is pending in the Supreme Court; management has not recognized any provision, but a potential liability could arise.
NEW RISK
European auto sector weakness impacting Netherlands
Turbulence in European auto giants, especially in Germany, could reduce demand for high-end steel products from the Netherlands.
RISK GONE
Supreme Court ruling on mineral tax could increase costs
The Supreme Court ruled states can levy tax on mineral rights, potentially increasing royalty costs for iron ore and coal, impacting margins.
RISK GONE
UK restructuring costs and transition risks
Closure of blast furnaces and transition to EAF involves significant one-off costs and execution risks, including employee redundancies and supply chain adjustments.
RISK GONE
Working capital buildup and debt increase
Net debt rose to INR 82,162 crore due to working capital buildup in UK and India, which may take time to unwind.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q3 FY24
Management expects Netherlands operations to turn EBITDA positive next financial year.
Mentioned in Q1 FY25, Q4 FY24
Full-year incremental volume from Kalinganagar expansion is guided at 1.4 million tons, as G Blast Furnace relining in Q4 offsets some gains.
Mentioned in Q1 FY24, Q4 FY24
Management targets net debt to EBITDA ratio below 2.5x by end of FY25, assuming market conditions remain at cycle bottom.
Mentioned in Q3 FY24, Q4 FY24
Negotiations with Dutch government for financial support are ongoing; no binding agreement yet, posing risk to green steel transition timeline.
Mentioned in Q2 FY24, Q4 FY24
Closure of blast furnaces by June/September 2024 may face operational or regulatory delays; grant funding agreement not yet signed.
Fast read
Guidance and risk preview
Net realizations in India are expected to decline by about INR 2,000 per ton in Q3 compared to Q2, due to lower July prices and auto contract adjus...
Chinese steel exports at 100 million tons annualized are distorting global trade and weighing on regional prices, impacting Tata Steel's margins.
View Risks →