loader2
Login Open ICICI 3-in-1 Account

Open ICICI
3-in-1 Account

Manage your Savings, Demat and Trading Account conveniently at one place

+91

BLOG

Tata Steel: New capacities ramp up and Structural cost optimization are focal points for FY26

ICICIdirect Research 16 May 2025 DISCLAIMER

On the consolidated basis, total operating income for the quarter came in at ₹56,218 crore (down 8% YoY, 3% QoQ) with steel sales volume at ~8.3 million tonne (up 4% YoY, 8% QoQ).

Consolidated EBITDA for the quarter came in at ₹6,559 crore with corresponding EBITDA margins at 11.7% (up 60 bps QoQ). Standalone EBITDA/tonne for Q4FY25 stood at ₹12,463/tonne, up ~₹1,000/ton QoQ (adjusting one-off non-cash gain reported in Q3FY25).

Importantly, the company has set a target of ₹11,500 crores in cost savings across regions for FY26E. Of this, the Indian operation aims to save ₹4,000. Additionally, the Netherland operation expected to save ~₹4,500 crores, while the UK operation aim to save ~₹3,000 crores in the same period.

Notably, the new capacity ramp up at Kalinganagar (~5 MTPA) is expected to drive the overall volume growth in FY26.

Moreover, it has guided domestic steel prices to increase ~₹3,000/ton QoQ, while coking coal cost are expected to further decline by ~$10/ton in Q1FY25. These are expected to support an improvement in company’s earnings prospects in the coming quarters.

We have a positive view on Tata Steel driven by capacity expansion, favourable domestic steel demand, a rebound in domestic steel prices, and heightened focus on cost optimization.
As per our estimates, the fair valued of Tata Steel stands at ₹200.

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere

Download ICICI Direct app

Invest, Track, and Manage your Portfolio Anytime, Anywhere