Tata Steel Reports Strong Q1 Financial Results for FY 2024-25

Tata Steel’s consolidated revenues for Q1 FY 2024-25 reached Rs 54,771 crores, with an EBITDA of Rs 6,822 crores, reflecting a robust 12.5% EBITDA margin.

Tata Steel today announced its financial results for the first quarter of the Financial Year 2024-25, showcasing a significant 75% year-over-year increase in consolidated net profit, which stood at Rs 919 crore.

JAMSHEDPUR – Tata Steel reported its financial results for the first quarter of the Financial Year 2024-25, with consolidated revenues for the April to June 2024 quarter at Rs 54,771 crores.

The company achieved an EBITDA of Rs 6,822 crores, translating to an EBITDA margin of approximately 12.5%.

The consolidated net profit for the quarter was Rs 919 crore, marking a 75% increase from the same quarter a year ago.

Capital Expenditure and Expansion

During the quarter, Tata Steel spent Rs 3,777 crores on capital expenditure.

The phased commissioning of the 5 MTPA expansion at Kalinganagar is progressing well, with the blast furnace start-up scheduled for September 2024.

The company’s net debt stands at Rs 82,162 crores, while the group liquidity remains strong at Rs 36,460 crores, including Rs 10,799 crores in cash and cash equivalents.

India Operations

Tata Steel’s India revenues were Rs 33,194 crores for the quarter, with an EBITDA of Rs 7,029 crores, yielding an EBITDA margin of 21%.

Crude steel production was around 5.27 million tons, a 5% year-over-year increase.

Deliveries reached 4.94 million tons, driven by a 4% rise in domestic deliveries.

The automotive segment witnessed its best-ever first-quarter sales, and Tata Tiscon deliveries rose 15% year-over-year, leading to the best-ever quarterly sales.

International Operations

Tata Steel’s UK revenues were £646 million with an EBITDA loss of £91 million, while Netherlands revenues were £1,344 million with an EBITDA of £43 million for the quarter.

The company commenced the closure of heavy-end assets at Port Talbot in the UK, with the shutdown of BF #5 in early July 2024.

The closure of BF #4 is scheduled for September 2024.

Management Comments

Mr. T V Narendran, Chief Executive Officer & Managing Director, stated, “During the quarter, subdued steel demand across most regions weighed on global steel prices. In India, steel demand was broadly stable despite some impact due to elections and heat waves.”

He further added: “Our crude steel production was up 5% YoY to around 5.3 million tons. Deliveries at around 4.9 million tons were the ‘best ever 1Q’ sales aided by 4% YoY growth in domestic deliveries. The automotive segment saw a 9% YoY growth, driven by higher than market growth in select subsegments. Tata Tiscon continued to grow with enhanced reach and scale-up of consumer connect programs.”

He also said: “We are focusing on innovative solutions to shape market practices and enhance customer experience to retain leadership in chosen segments. We continue to expand our footprint via new dealer appointments, e-commerce portals, and influencers. The 5 MTPA expansion project at Kalinganagar is on track for the blast furnace to start in September 2024. The heating process for blast furnace stoves and coke oven batteries has commenced as planned. Additionally, the commissioning activities for the Continuous Annealing Line of the 2.2 MTPA CRM complex at Kalinganagar are progressing well for startup in August 2024. In the UK, we have safely ceased operations at one of the blast furnaces (BF #5) at Port Talbot and are on track to close the remaining blast furnace by September 2024.”

Talking about employees, he said: “We are committed to supporting affected employees alongside providing multiple training and community support schemes. In the Netherlands, our production has risen on a QoQ as well as YoY basis, upon return to normal operating levels. Sustainable operations are integral to our strategic goals, and Tata Steel has launched the first carbon bank in India. Further, Tata Steel remains dedicated to enhancing diversity and I am happy to share that we recently deployed the first-ever crew of female firefighters in the Indian steel industry.”

Mr. Koushik Chatterjee, Executive Director and Chief Financial Officer, added, “Tata Steel Consolidated revenues for the quarter were Rs 54,771 crores and EBITDA was Rs 6,822 crores. Consolidated EBITDA margin was around 12.5%, with an improvement of more than 100 bps on QoQ basis. India revenues were around Rs 33,194 crores and EBITDA was Rs 7,029 crores, which translates to an EBITDA per ton of Rs 14,227 and an EBITDA margin of 21%. Netherlands revenues were broadly stable despite subdued demand dynamics, but the cost profile continued to improve with stabilisation of operations, leading to EBITDA improving from – ve £27 million in 4Q to +ve £43 million in 1Q.”

He further said: “This was partly offset by EBITDA loss at UK operations which is in the midst of restructuring and transition. Given the planned closure of blast furnaces in the UK, there has been steel stock build-up for the downstream operations which impacted working capital. We continue to focus on growth in India and have spent Rs 3,777 crores on capital expenditure during the quarter. Net debt stands at Rs 82,162 crores. Group liquidity position remains strong at Rs 36,460 crores, which includes Rs 10,799 crores of cash and cash equivalents. We also remain focused on cost optimisation, operational improvements, and working capital management to maximise cashflows.”

With respect to the UK transition, he said: “We are proceeding as per previously announced timelines for the closure of the heavy end, a step which is critical to address the deep cash burn associated with the upstream end of life assets. We are also on track with regard to supply chain preparedness for imports of semi-finished steel which will be utilised by the downstream assets to continue to service customers after the closure of the blast furnaces. We are fully committed to supporting affected employees, have offered the best-ever package of support in Tata Steel UK, and continue to engage deeply with the Unions in this respect. The Voluntary Redundancy Aspiration process was launched on 10th July and will close on 7th August. We are working closely with the recently elected UK government on finalisation of grant funding process for the new Electric Arc Furnace project. We have also started active engagement with the government in the Netherlands on support for the decarbonisation project.”