Tata Steel Q1 profit rises 12% as India business offsets overseas headwinds; board clears ₹33,873 crore NINL expansion

Tata Steel reported a steady set of earnings for the quarter ended June 30, with consolidated profit attributable to owners rising 11.6% year-on-year as the company's resilient India operations offset operational disruptions at its overseas businesses. The steelmaker also approved a ₹33,873-crore expansion project at Neelachal Ispat Nigam Ltd. (NINL), stressing its long-term growth ambitions in the domestic market.

Profit attributable to owners of the company stood at ₹2,318.4 crore in the first quarter of FY27, compared with ₹2,077.7 crore in the year-ago period. Revenue from operations increased 14.3% to ₹60,794.3 crore, while operational EBITDA rose 24.7% to ₹9,264.3 crore. Operational EBITDA margin improved to 15% from 14% a year earlier. The quarter included an exceptional loss of ₹345.5 crore, higher than ₹132 crore in the corresponding quarter last year.

India business remains growth engine

The company's domestic operations continued to anchor performance despite a challenging global operating environment marked by geopolitical tensions, higher input costs and operational disruptions in Europe.

India revenues stood at ₹36,989 crore during the quarter, while EBITDA improved to ₹9,908 crore, translating into an EBITDA margin of 27%. EBITDA per tonne in India rose to ₹19,162 from ₹15,907 in the preceding quarter, supported by stronger steel realisations and an improved product mix. Domestic deliveries increased 11% year-on-year to 4.85 million tonnes, although overall production and deliveries were impacted by planned maintenance shutdowns at the Meramandali and Kalinganagar plants.

"Global operating environment remained complex, with the impact of developments in West Asia on supply chains and input costs being more pronounced in the quarter. Despite these headwinds, Tata Steel delivered a sequential improvement in EBITDA per ton for the third consecutive quarter. India continued to be the backbone of our performance," said T V Narendran, chief executive officer and managing director.

Overseas challenges persist, NINL expansion approved

While India's performance remained robust, Tata Steel's European operations continued to face challenges. In the Netherlands, operations were affected by the temporary closure of the Direct Sheet Plant, although trial runs have commenced ahead of a full restart. In the UK, the company's EBITDA loss narrowed to £27 million from £48 million in the previous quarter, aided by pricing improvements and operational initiatives.

The board also approved the core project for expanding steelmaking capacity at wholly owned subsidiary Neelachal Ispat Nigam Ltd. by 4.8 million tonnes per annum at an estimated investment of ₹33,873 crore. The expansion will increase NINL's total capacity to 6.2 MTPA and strengthen Tata Steel's presence in the long products segment, particularly in the retail market.

Chief financial officer Koushik Chatterjee said the company remained focused on improving cash generation despite temporary working capital pressures.

"We remain focused on cost optimisation and working capital efficiency to maximise cashflows. Net debt stood at ₹84,173 crore and net debt-to-EBITDA was 2.3x, below our stated through-cycle range of 2.5x to 3.0x. Our group liquidity remains strong at ₹45,950 crore," he said. 

Shares of Tata Steel ended 0.15% lower at ₹186.99 apiece on the NSE on Thursday. The stock has surged over 15% during the past year, outperforming the Nifty 50 index that has slipped over 2% during the period.