TATASTEEL - TATA STEEL LIMITED Share Price

The management of Tata Steel provided a robust outlook during the earnings discussion. For the quarter ending December 2025, they highlighted a consolidated revenue of Rs.57,002 crores and an EBITDA of Rs.8,309 crores, leading to an EBITDA margin of 15%. The CEO, T.V. Narendran, emphasized that India continues to be a pivotal market, with crude steel production rising by approximately 12% year-over-year to around 6.34 million tons, significantly improving overall sales.

Key forward-looking points include the expectation that EBITDA in India will expand due to better pricing dynamics, projected to be Rs.2,300/t higher in the fourth quarter, supported by a growing demand environment. The firm also reported that EBITDA margins, particularly from automotive and downstream segments, remained strong at 24% in India, reflecting disciplined execution amid challenging global conditions.

In the UK, current EBITDA losses narrowed, with efforts being made to adapt to changing market dynamics, with hopes for improved profitability once safeguard measures are revised. In the Netherlands, management expects a stable production outlook with enhancements in operational efficiency, despite some anticipated price reductions.

The company committed to significant capital investments in expanding its production capacity, including an increase in the color-coated business to meet rising demand, and emphasized its strategy to move towards sustainable steel-making processes.

Overall, management indicated a confident outlook, projecting continued efforts to optimize costs, improve operational efficiency, and capitalize on growth opportunities in both domestic and international markets while navigating regulatory challenges in Europe.

Question 1: "Now some of the European players have come out with very strong commentary on pricing. ArcelorMittal has actually raised April delivery prices to €700/t, which is another €60/t higher than spot. Just want to understand how sticky and sustainable could these be because it looks like demand is still weak, but like you mentioned, expectations are around higher utilisation levels as imports start to come down."

Answer: I see European demand stabilizing around 130 million tons, while imports may reduce to 15 million tons due to quotas. This will increase local prices as supply tightens and the impact of CBAM is factored in. While prices may not fully reach U.S. levels, they should trend upward due to these dynamics.

Question 2: "Just want to understand the broad timeline for all the capacity expansions - NINL, then this 2.5 MTPA at Meramandali and any indication that you can provide for the Maharashtra greenfield."

Answer: The NINL expansion should take about 35-40 months once we secure environmental clearance soon. The Meramandali expansion timeline will depend on similar clearances, while Maharashtra's plans are in early stages and will take longer, likely beyond five years. We aim to stay within a net debt-to-EBITDA ratio below 3x.

Question 3: "What is the status now on UK, the safeguards and what discussions are you having with the government? Is there any progress there?"

Answer: We are actively engaging with UK authorities for safeguard revisions. Progress is encouraging, as these actions are critical for the domestic steel industry's health, including ours, to align with EU tariffs and quotas.

Question 4: "So how should we look at UK over the next few quarters? There's a safeguard in India, there's CBAM in Europe, but there's nothing in UK."

Answer: UK operations have undergone significant cost reductions. Although we faced losses, we expect better performance with changes to safeguard policies. The dynamics of the EU market may prompt quicker UK policy adjustments, impacting EBITDA positively.

Question 5: "On India, firstly, congratulations on the improving leverage ratios. Is it fair to say that the December quarter EBITDA per ton was probably the low till the safeguard duty is in place?"

Answer: Yes, December quarter prices were likely the lowest in the last five years. With the implementation of the safeguard duty, we anticipate improvements in prices and EBITDA moving forward.

Question 6: "Are we looking at any plans for electrical steel like CRGO, because I think the transformer industry has been kind of complaining for some time that India is short of electrical steel capacity?"

Answer: Yes, CRGO is part of our plans, likely in Jamshedpur. We're assessing the setup to meet the growing demand in the transformer industry while ensuring we can scale production adequately.

Question 7: "How should we view the price increases in Europe? Are these increases pass-throughs or will costs also factor into the bottom line?"

Answer: Price increases due to CBAM will generally be pass-throughs without additional cost implications for us. Our focus remains on continual cost takeouts to maintain competitive pricing and profitability.

Question 8: "Can we expect any support from the Indian government for the HIsarna pilot project?"

Answer: We're optimistic about potential government support for the HIsarna project, which we're establishing in Jamshedpur. We see significant value in its flexibility in raw materials usage and COâ‚‚ reduction capabilities.