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Tata Steel: muted performance in Q1FY25; re-structuring at European operations holds the key

ICICIdirect Research 02 Aug 2024 DISCLAIMER
  • Consolidated topline for the quarter came in at ₹54,771 crore (down 8% YoY, 7% QoQ) with steel sales volume of ~7.4 million tonne (up 2.6% YoY, down 7.4% QoQ).
  • EBITDA came in at ₹6,695 crore with corresponding EBITDA margins at 12.2% (up 100 bps QoQ).
  • Standalone operations reported adjusted EBITDA/tonne of ₹13,711 vs. ₹14,891 in Q4FY24, impacted by higher overhead costs despite savings realized under raw material cost.
  • UK revenue for the quarter was at £646 million with EBITDA loss of £91 million, whereas Netherland revenue stood at £1,344 million with EBITDA profit of £43 million.
  • The company is actively looking at restructuring at its European operations especially UK, the developments over which will weigh on stock price going forward.
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