India Demand Lifts Tata Steel Earnings

Tata Steel delivered a robust financial performance in the final quarter of fiscal year 2025, reporting a consolidated net profit of ₹1,301 crore, a substantial 113% increase compared to the ₹611 crore recorded in the corresponding period of the previous fiscal.

This impressive surge in profitability, which surpassed market analysts’ projections of ₹1,062 crore, underscores the resilience of the steel giant amidst a year of significant operational transitions and strategic realignments. The positive earnings momentum is expected to place Tata Steel’s shares firmly in the spotlight as trading commences on Tuesday. While the total revenue from operations for the quarter ending March 2025 stood at ₹56,218 crore, reflecting a modest 4.2% year-on-year contraction from ₹58,687 crore, it demonstrated a healthy 5% sequential growth from ₹53,648 crore in the preceding quarter. This sequential uptrend in revenue suggests a strengthening demand environment and the effectiveness of Tata Steel’s strategic initiatives. Bolstering investor sentiment, the company’s board of directors has recommended a dividend of ₹3.60 per equity share for the fiscal year 2024-25, signaling confidence in future performance and a commitment to shareholder returns.

A closer examination of the financials reveals a remarkable 298% sequential jump in profit after tax, escalating from ₹327 crore in the third quarter. This exponential growth in profitability was primarily propelled by enhanced sales volumes and a notable reduction in raw material expenses, particularly across Tata Steel’s operations in India and the Netherlands. Consolidated expenses witnessed a 4% year-on-year decline to ₹54,168 crore, although they registered a 4% increase on a quarter-on-quarter basis, reflecting the dynamic nature of operational costs in the steel manufacturing sector.

The company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) for the quarter reached ₹6,762 crore, a marginal increase from ₹6,631 crore in the fourth quarter of the previous fiscal and an improvement from ₹5,994 crore in the third quarter of FY25. However, the adjusted EBITDA per tonne experienced a dip to ₹7,810, compared to ₹9,263 in the preceding quarter and ₹8,735 in the corresponding period last year. This suggests that while overall profitability improved, pricing pressures or shifts in product mix may have influenced per-tonne earnings.

T V Narendran, CEO & Managing Director of Tata Steel, highlighted the transformative nature of the fiscal year, stating, “FY2025 was an important transition year for Tata Steel with significant developments across operating geographies. We commissioned India’s largest blast furnace at Kalinganagar, safely decommissioned two blast furnaces in UK and achieved production levels near rated capacity in Netherlands. India deliveries were best ever at around 21 million tons and were up 5% YoY aided by a smooth ramp up of the new blast furnace at Kalinganagar and capacity utilisation close to 100% at the remaining operations.” His comments underscore the strategic focus on optimising production capabilities and catering to the robust domestic demand.

Furthermore, Narendran emphasised Tata Steel’s commitment to innovation and sustainability, noting, “We have invested more than ₹1,600 crores on R&D in the last 5 years, enabling us to become the first Indian steel supplier to have end-to-end capabilities in hydrogen transportation and to localise CP780 automotive grade demonstrating our customer centricity. In yet another step towards growing in chosen segments in India, we have begun catering to commercial shipbuilding.” This focus on research and development, including advancements in hydrogen transportation, aligns with the global push towards cleaner energy solutions and positions Tata Steel at the forefront of sustainable steelmaking practices. The foray into commercial shipbuilding also signifies a strategic diversification into high-growth sectors within the Indian economy.

According to market analysis by Trendlyne, the average target price for Tata Steel stands at ₹153, indicating a modest potential upside from current trading levels. The consensus rating among the 30 analysts covering the stock remains a ‘Buy’, reflecting overall positive sentiment towards the company’s future prospects. While the near-term upside may appear limited based on average targets, the strong Q4 performance, coupled with strategic investments in capacity enhancement and sustainable technologies, paints a promising picture for Tata Steel’s long-term growth trajectory within the evolving Indian economic landscape.

India Demand Lifts Tata Steel Earnings