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Tata Steel: Further walks the talk on improving profitability at its European Operations


Tata Steel has announced restructuring at its Netherland operations (Capacity: 7 million tonnes per annum)
The restructuring plan is part of the company’s efforts to mitigate high costs particularly energy cost and address lower demand in Europe, where spreads have reached an all-time low of $170/ton (vs annual average of $240/ton). It plans to restructure its organizational setup, including a reduction of ~1,600 employees, constituting ~18% of the 9,000 workforce at the IJmuiden plant in Netherlands.
Furthermore, the company will focus on improving production efficiency, reducing fixed costs, and optimizing its product mix. This is expected to generate savings of €500 million in FY26 (equivalent to ~€70/ton), with an additional €50–60 million in savings anticipated in FY27.
Thus, this restructuring initiative will help in improving the company’s operating efficiencies and margin profile going forward.
Our ballpark fair value for Tata Steel is pegged at ~₹ 150/share, offering healthy double-digit upside from current levels
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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