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

ICICIdirect Research 11 Apr 2025 DISCLAIMER

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

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