Tata Steel Q3 Results: Surprise Profit of ₹327 Crore, Beating Market Estimates
Tata Steel Ltd: Overview
Tata Steel Ltd, a flagship company of the Tata Group, is one of the world’s largest steel manufacturers with a global presence spanning over 50 countries. Established in 1907, Tata Steel is a pioneer in the Indian steel industry, with its operations encompassing mining, steel production, and distribution. Tata Steel is one of the most diversified integrated steel producers in the world, with an annual crude steel production capacity of 35 MTPA. The Company’s manufacturing assets are spread across India, the Netherlands, the UK, and Thailand. The company’s products serve diverse industries, including construction, automotive, infrastructure, engineering, and consumer goods.
Tata Steel has been a key player in driving India’s industrial growth and is renowned for its commitment to sustainability, innovation, and operational excellence. The global steel industry is poised for growth, supported by infrastructure development, rising urbanization, and demand for advanced automotive materials. With a production capacity of over 34 million tonnes per annum (MTPA) globally (as of FY25), Tata Steel has an integrated value chain that includes raw material mining, steelmaking, and value-added products. The global steel industry is driven by infrastructure development, urbanization, and demand from the automotive and construction sectors. Tata Steel, with its diversified product portfolio and strong brand equity, is well-positioned to capitalize on these opportunities. The company is also focusing on decarbonization and aims to achieve carbon neutrality by 2045, aligning with global sustainability trends.
Latest Stock News
India’s largest blast furnace at Kalinganagar is making great strides, with production steadily ramping up. In December 2024, the plant successfully produced its first annealed coil from the 2.2 MTPA Cold Roll Mill. That same month, the Coke Oven Battery #3A was commissioned, marking another milestone in the 5 MTPA capacity expansions at Kalinganagar. This expansion is set to boost production of high-strength hot-rolled steel, catering to key sectors such as Oil & Gas, Lift & Escalator, and Engineering. Deliveries were higher by 2% and include volumes to UK operations. Excluding transfers to UK, External deliveries were up 7% on QoQ basis.
Tata Steel’s India operations continue to perform strongly, reporting an impressive EBITDA margin of about 24%, with Indian volumes contributing nearly 70% of total deliveries. The company also invested ₹3,868 crores in capital expenditure during the quarter to further its growth plans. Raw material cost decreased upon cessation of liquid steel production partly offset by higher purchases. Globally, steel prices remained under pressure between October and December 2024. In the U.S., prices dipped by 2%, while in the EU, they fell by around 5%. Meanwhile, raw material prices showed mixed trends—coking coal prices dropped by 7%, settling below $200 per ton, while iron ore prices remained steady, fluctuating between $100 and $110 per ton.
Business Segments
- Steel Manufacturing: Tata Steel operates an extensive network of steel plants in India and internationally, producing flat and long steel products. Its advanced manufacturing facilities in Jamshedpur, Kalinganagar, and Angul are benchmarks in productivity and efficiency. The company’s Indian operations contribute significantly to its overall production and profitability.
- Mining and Raw Materials: To ensure a stable supply of critical raw materials, Tata Steel has backward integrated operations with captive mines for coal, iron ore, and chrome. These mines are strategically located to support the company’s steel plants, reducing dependency on external suppliers and enhancing cost competitiveness.
- International Operations: Tata Steel has a strong international footprint, with operations in Europe (Tata Steel Europe), Southeast Asia, and the Middle East. Tata Steel Europe focuses on high-value products for automotive and construction industries, while the Southeast Asian operations are focused on cost-effective steelmaking for regional markets.
- Others: This includes a variety of niche products and solutions, such as automotive maintenance products, waterproofing services, and wood finishes. The company also operates in the animal health and crop care segment through specialty chemicals.
Subsidiary Information
- Tata Steel Long Products Ltd: Tata Steel Long Products (TSLP) is a critical subsidiary of Tata Steel, focusing on the production of long steel products that cater primarily to the automotive and construction sectors. These products are essential for infrastructure development and automobile manufacturing, making TSLP a significant contributor to Tata Steel’s portfolio of value-added offerings. With its robust capabilities, TSLP plays an instrumental role in strengthening Tata Steel’s position in the long steel segment, ensuring high-quality solutions for its customers.
- Tata Steel Mining Ltd: Tata Steel Mining Ltd. oversees the company’s mining operations, ensuring a steady and reliable supply of key raw materials such as iron ore and ferroalloys for steel production. This vertical integration strategy allows Tata Steel to maintain cost efficiency and reduce dependency on external suppliers. The subsidiary’s operations are vital for supporting the company’s production processes, aligning with Tata Steel’s commitment to operational excellence and raw material security.
- Tata Metaliks Ltd: Tata Metaliks specializes in the production of pig iron and ductile iron pipes, catering to the burgeoning needs of India’s water infrastructure and construction sectors. The subsidiary’s products play a crucial role in facilitating the development of water supply systems, urban infrastructure, and housing projects across the country. Tata Metaliks contributes significantly to Tata Steel’s diversified product portfolio, ensuring the company’s presence in niche yet essential market segments.
- Tinplate Company of India Ltd: The Tinplate Company of India Ltd. is a leading manufacturer of tin-coated and tin-free steel products, serving the packaging industry. This subsidiary provides high-quality tinplate solutions that are widely used in packaging applications, including food and beverage containers. With a strong focus on quality and innovation, the subsidiary enhances Tata Steel’s value chain and strengthens its presence in the growing packaging sector.
- Tata Steel BSL Ltd: Acquired in 2018, Tata Steel BSL Ltd. significantly enhances Tata Steel’s capacity in the flat steel segment, catering to diverse industries such as automotive, consumer durables, and general engineering. This acquisition has enabled Tata Steel to expand its product offerings, address a wider range of customer requirements, and strengthen its market presence. The subsidiary plays a crucial role in supporting Tata Steel’s growth ambitions and delivering high-quality solutions to its customers.
Q3 FY25 Earnings
- Revenue of ₹53648 crore in Q3 FY25 down by 3.01% YoY from ₹55312 crore in Q3 FY24.
- EBITDA of ₹2903 crore in this quarter at a margin of 11% compared to 11% in Q3 FY24.
- Profit of ₹295 crore in this quarter compared to a ₹522 crore profit in Q3 FY24.
Financial Summary
| Amount in ₹ Cr | Q3 FY24 | Q3 FY25 | FY23 | FY24 |
| Revenue | 55312 | 53648 | 243353 | 229171 |
| Expenses | 49048 | 47745 | 211053 | 206923 |
| EBITDA | 6264 | 5903 | 32300 | 22248 |
| OPM | 11% | 11% | 13% | 10% |
| Other Income | -33 | 142 | 1569 | -6005 |
| Net Profit | 522 | 295 | 8075 | -4910 |
| NPM | 0.9% | 0.5% | 3.3% | -2.1% |
| EPS | 0.42 | 0.26 | 7.2 | -3.6 |