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View Promises →Tata Steel Limited — Q3 FY24
Tata Steel's Q3 FY24 consolidated revenue stood at INR 55,312 crore with EBITDA of INR 6,334 crore, yielding an 11% EBITDA margin, up 300 bps QoQ.
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Tata Steel's Q3 FY24 consolidated revenue stood at INR 55,312 crore with EBITDA of INR 6,334 crore, yielding an 11% EBITDA margin, up 300 bps QoQ. India standalone EBITDA margin improved to 24% (+400 bps QoQ) driven by higher realizations and cost controls, while Netherlands and UK continued to bleed due to operational issues and weak spreads. Management guided for India realizations to be ~INR 1,000 lower QoQ in Q4 and coking coal costs ~$10 higher. The UK restructuring plan involves phased closure of blast furnaces in 2024, transitioning to an EAF by 2027 with GBP 1.25 billion investment (GBP 500 million government support). Key risks include execution of UK transition, volatile coking coal costs, and potential Chinese steel export surge.
टाटा स्टील की तीसरी तिमाही में कुल कमाई 55,312 करोड़ रुपये रही। कंपनी ने 6,334 करोड़ रुपये का EBITDA कमाया, यानी मुनाफे का मार्जिन 11% रहा, जो पिछली तिमाही से 3% ज्यादा है। भारत में मार्जिन 24% तक पहुंच गया, क्योंकि कीमतें बढ़ीं और खर्च घटा। लेकिन नीदरलैंड और UK में कंपनी को घाटा हुआ। अगली तिमाही में भारत में कीमतें 1,000 रुपये प्रति टन कम हो सकती हैं और कोयले की लागत 10 डॉलर बढ़ सकती है। UK में पुराने भट्टियां बंद करके 2027 तक नई तकनीक लगाई जाएगी, जिसमें 1.25 बिलियन पाउंड का निवेश होगा। मुख्य जोखिम हैं: UK योजना का सही से लागू होना, कोयले की कीमतों में उतार-चढ़ाव और चीन से स्टील का सस्ता आयात।
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UK transition execution risk
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Read Transcript →Quarter Snapshot
India EBITDA per ton
INR 16,923
+INR 3,523 QoQ
Improved from INR 13,400 in Q2 due to higher realizations and inventory build.
India standalone EBITDA margin
24%
+400 bps QoQ
Expanded from 20% in Q2, driven by cost optimization and better product mix.
UK EBITDA loss
GBP 115 million
-GBP 17 million QoQ
Loss narrowed from GBP 132 million in Q2, but production remained low due to asset end-of-life.
Netherlands EBITDA loss
INR 117 million
+INR 7 million QoQ
Loss slightly widened from INR 110 million in Q2 due to delayed BF6 restart.
What Changed vs Last Quarter
NEW
Coking coal consumption cost ~$10 higher QoQ in Q4
Coking coal cost on consumption basis expected to increase by about $10 per ton in Q4.
NEW
UK losses to be halved in FY25 vs FY24
Management expects to significantly reduce UK losses next year, targeting a 50% reduction.
UPDATED
India realizations expected ~INR 1,000 lower QoQ in Q4
Management guided for a sequential decline in net realizations in India for Q4 FY24.
UPDATED
Netherlands to be EBITDA positive in FY25
Management expects Netherlands operations to turn EBITDA positive next financial year.
DROPPED
UK transition to be cash neutral during transition period
Management aims to run the UK business in transition such that it is cash neutral or cash positive, excluding one-time restructuring costs.
DROPPED
India capacity target of 40 million tons by FY30
Tata Steel plans to reach 40 million tons of India capacity by 2030 through expansions at Kalinganagar, Neelachal, Bhushan, and EAF projects.
NEW RISK
UK transition execution risk
Phased closure of blast furnaces and transition to EAF by 2027 faces execution challenges, including union negotiations and grid infrastructure.
NEW RISK
Coking coal cost volatility
Coking coal costs are expected to rise $10 QoQ in Q4, and further increases could pressure margins.
NEW RISK
Chinese steel export surge
High Chinese steel exports could depress global prices and impact Tata Steel's realizations.
NEW RISK
Netherlands profitability uncertainty
Despite BF6 restart, Netherlands may take time to return to profitability due to lagging contract prices and CO2 costs.
RISK GONE
European steel spreads remain weak
Current spot spreads in Europe are low due to high coking coal prices and subdued demand, which could delay the turnaround in Netherlands and UK.
RISK GONE
UK restructuring execution and union negotiations
The UK transition plan is subject to union consultation and regulatory approvals; delays or higher-than-expected costs could increase cash outflows.
RISK GONE
Chinese steel exports pressuring global prices
China's elevated steel exports (~8 million tons/month) are depressing international prices, which could spill over into India and impact realizations.
RISK GONE
Net debt may remain elevated near-term
Despite strong India cash flows, net debt increased by INR 5,600 crore QoQ; management expects it to stay around current levels for the next two quarters.
Fast read
Guidance and risk preview
Management guided for a sequential decline in net realizations in India for Q4 FY24.
Phased closure of blast furnaces and transition to EAF by 2027 faces execution challenges, including union negotiations and grid infrastructure.
View Risks →