Informist, Wednesday, Jul. 30, 2025

By Avishek Rakshit

KOLKATA – Planned cost reduction measures and higher realisations from sales despite a decline in volume led Tata Steel Ltd. to report a sharp increase in its consolidated net profit for the June quarter as it more than doubled to INR 20.8 billion and beat the Street's projection of INR 16.9 billion by a wide margin. Tata Steel reported a net profit of INR 9.6 billion in the year-ago quarter.

The company's consolidated revenue, however, declined by 2.8% on year to INR 531.8 billion during the quarter under review, primarily on account of lower volume; but improvement in price realisations offset the revenue loss to a large extent. Revenues from India declined over 6% on year to INR 311.4 billion during the June quarter as against INR 331.9 billion in the similar quarter of 2024-25 (Apr-Mar).

In its European operations, although revenue in rupee terms remained flat at INR 195.9 billion, Tata Steel made a pre-tax profit of INR 1.4 billion as against the loss of nearly INR 5 billion in the June quarter of FY25.

In a statement, Tata Steel said that its UK revenues were 536 million pound sterling for the quarter and earnings before interest, tax, depreciation, and amortisation loss was 41 million pound sterling as against the EBITDA loss of 80 million pound sterling during Jan-Mar. Deliveries in the UK stood at 600,000 tonnes and were marginally lower due to subdued demand. In the Netherlands, revenues were Euro 1,519 million for the quarter and EBITDA was Euro 64 million as against Euro 14 million in Jan-Mar. Liquid steel production at the Netherlands was 1.7 million tonnes and deliveries were 1.5 million tonnes.

The company's consolidated sales volume declined by 3.7% on year at 7.1 million tonne in the June quarter as against 7.4 million tonne in the similar quarter of the last financial year. Sales in India declined by a similar percentage to 4.8 million tonne. Tata Steel's consolidated production fell by 8.4% on year to 7.3 million tonne during Apr-Jun as against 8 million tonne in the year-ago quarter. In India, the output declined marginally by 0.6% on year to 5.2 million tonne during Apr-Jun. Production and deliveries were affected by maintenance shutdowns in its Jamshedpur plant and its wholly owned subsidiary Neelachal Ispat Nigam Ltd., which it acquired on Jul. 24.

"The strong improvement in our 1Q performance (Apr-Jun) on QoQ (quarter-on-quarter) as well as YoY (year-on-year) basis was driven by an increase in our net steel realisations and the planned cost-take outs," T.V. Narendran, the company's chief executive officer and managing director said in the statement. "In India, our large distribution network with 25,000+ dealers & distributors and our focus on delivering customer requirements helped us in selling higher value-added products and in creating value from the new facilities we commissioned."

During the June quarter, the company's consolidated adjusted EBITDA per tonne of sales, which determines the actual profitability from unit sales, improved by 11.3% on year to INR 10,470. The consolidated reported EBITDA per tonne of sales also increased by 13.7% on year to INR 10,503.

Cost containment measures together with improved realisations from sales led the consolidated adjusted EBITDA to increase by 7.3% on year to INR 74.6 billion and the reported EBITDA to go up by 9.6% on year to INR 74.8 billion during the June quarter. The consolidated operating EBITDA margin increased to 14.07% during the quarter under review as against 12.46% during Apr-Jun of FY25.

"Higher steel realisations offset the decline in volumes across geographies. Our cost transformation program, focused on multiple levers including operating KPIs (key performance indicators), supply chain and procurement, has delivered around Rs 2,900 crores (INR 29 billion) during the quarter," Koushik Chatterjee, Tata Steel's executive director and chief financial officer said in the statement. "We remain focused on cost optimisation, operational improvements and working capital management to maximise cashflows."

The company's prime cost overheads came down in the June quarter. Raw material costs were down by 12.7% on year at INR 180.3 billion and purchase of stock in trade was down by 9.3% on year at INR 39.5 billion. Although other cost overheads like employee benefit expenses, finance costs, depreciation and amortisation outgo increased on year, Tata Steel was able to report a 3.9% on-year decline in its total expenses for the June quarter at INR 503.5 billion.

In the statement, Tata Steel said that it spent INR 38.3 billion on capital expenditure during the quarter and its net debt as of Jun. 30 stands at INR 848.4 billion. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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