Tata Steel Reports 18% Increase in Q2 Net Profit to ₹3,660 Crore

Tata Steel has reported an 18 percent increase in its net profit, attributed to owners, reaching ₹3,660 crore for the September quarter. This compares to a net profit of ₹3,102 crore logged in the same period of the previous fiscal year, driven by better realisation.

During the quarter, revenue increased by 12 percent to ₹64,974 crore, up from ₹58,216 crore in the corresponding period last year. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) rose to ₹10,665 crore compared to ₹9,106 crore, while EBITDA per tonne jumped to ₹13,462 from ₹11,518.

The company reported an increase in its gross debt, which went up to ₹1.02 lakh crore against ₹97,985 crore recorded in the June quarter. Tata Steel stated that it held cash and cash equivalents of ₹10,301 crore alongside a mark-to-market gain of ₹644 crore in currency hedge, resulting in a net debt of ₹91,423 crore. Total group liquidity stood at ₹40,076 crore.

TV Narendran, Chief Executive Officer and Managing Director of Tata Steel, noted that the company delivered strong growth in deliveries and earnings during the quarter despite ongoing geoeconomic uncertainty and higher raw material costs. He pointed out that operations in the Netherlands benefited from the successful restart of the Direct Sheet Plant, improving the product mix and cost profile. Regarding the UK operations, Narendran mentioned that market conditions continue to be influenced by elevated imports and inventory build-up.

Koushik Chatterjee, Executive Director and Chief Financial Officer, stated that Neelachal Ispat Nigam generated an EBITDA of ₹318 crore, with its amalgamation into Tata Steel remaining on track for completion during the financial year, pending final National Company Law Tribunal (NCLT) approval. Chatterjee also noted that EBITDA in the Netherlands improved from €4 million in the first quarter to €72 million in the second quarter.

Tata Steel spent approximately ₹3,280 crore on capital expenditure during the quarter, bringing the total capex for the first half of the fiscal year to ₹6,860 crore. Ongoing capital expenditure projects include a 4.8 MTPA capacity expansion at Neelachal Ispat Nigam, alongside downstream growth projects such as a 0.7 MTPA Hot Rolled Pickling and Galvanising Line and a 300 kt Tinplate expansion.

In board-level updates, Noel Naval Tata will retire as a Non-Executive, Non-Independent Director and Vice Chairman of the board on November 11. He has been associated with the company since March 2022.

"Tata Steel's latest financial results demonstrate steady operational resilience and revenue growth despite broader global economic uncertainties and cost pressures. While the increase in profitability through better realisation is a positive indicator, the simultaneous rise in gross debt highlights the capital-intensive nature of the steel sector, particularly during active expansion phases like the ongoing projects at Neelachal Ispat Nigam. Managing leverage alongside disciplined capital expenditure will remain crucial for sustaining long-term financial health in this industry." — Dr. Shishir Gupta, Founder & CEO, StartupLanes