Company Update : Tata Steel by Motilal Oswal Financial Services Ltd
EBITDA above estimates as Europe’s performance improves; lower tax outgo drives sharp APAT beat
Highlights of standalone results:
* Revenue stood at INR310b (fell 6% YoY and 10% QoQ), in line with our estimates. The decline was largely driven by muted volumes during the quarter.
* Steel production stood at 5.07mt (+1% YoY and -3% QoQ), while deliveries were in line with our estimates at 4.75mt, declining 4% YoY and 15% QoQ. Production and deliveries were affected by maintenance shutdowns in the Jamshedpur and NINL plants.
* ASP strongly rebounded to INR65,293/t in 1QFY26, rising 6% QoQ, but remained 2% lower YoY during the quarter.
* EBITDA during 1QFY26 stood at INR71.2b (+5% YoY and +2% QoQ), in line with our estimates, translating into an EBITDA/t of INR14,988/t (+9% YoY and +20% QoQ).
* APAT for the quarter stood at INR37b (+5% YoY and +1% QoQ), against our estimate of INR34b, led by a lower tax outgo and better operating profit.
Highlights of consolidated results:
* Revenue stood at INR532b (-3% YoY and -5% QoQ) and was 6% above our estimate. The decline was mainly due to muted volumes during the quarter.
* Sales volume stood at 7.12mt (-4% YoY and -15% QoQ), which was offset by a better ASP of INR74,688/t (+1% YoY and +11% QoQ) in 1QFY26.
* Adjusted EBITDA stood at INR74.3b (+11% YoY and +13% QoQ) against our estimate of INR69.6b, translating into an EBITDA/t of INR10,432 (+15% YoY and +32% QoQ) in 1QFY26.
* APAT for the quarter stood at INR21.3b (+62% YoY and +26% QoQ), against our estimate of INR15.8b, on account of a lower tax outgo.
Highlights of European operations:
* Consol. steel deliveries stood at 2.1mt (-2% YoY and -12% QoQ), in line with our estimates.
* Revenue stood at INR207b (-1% YoY and flat QoQ), 8% above our estimates.
* EBITDA turned positive during the quarter at INR1.45b (our est. INR0.62b), against an EBITDA loss of INR5b in 1QFY25 and INR7.5b in 4QFY25.
* EBITDA/t stood at USD8/t in 1QFY26, against an EBITDA/t loss of USD28/t in 1QFY25 and USD38/t in 4QFY25.
Other highlights:
* Net debt stood at INR848b as of 1QFY26, which includes cash of INR141b. This translates into net debt/EBITDA of 3.21x as of Jun’25.
* TATA has spent INR38.3b on capex during the quarter. The 5mtpa BF at Kalinganagar is ramping up well and has successfully commissioned one of the two Galvanising lines in the 2.2mtpa CRM complex.
* Construction is currently underway for the EAF in Ludhiana.
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