Q1 2027 Tata Steel Ltd Earnings Call Transcript
Key Points
- India business delivered a resilient performance with EBITDA margin of 27%, higher than the 10-year average, and EBITDA per tonne improved to INR19,162.
- Automotive and Specialty business achieved best-ever Q1 volumes with 21% year-on-year growth in high-end sales, supported by new product developments like DP980 steel.
- Board approved a 4.8 million tonne expansion at Neelachal Ispat (NINL) for INR33,873 crores, which will increase total capacity to 6.2 million tonnes, strengthening long products portfolio.
- UK business continued its improvement trajectory with EBITDA losses narrowing for the fourth consecutive quarter, from -GBP48 million to -GBP27 million, aided by higher realizations and trade safeguard measures.
- Group liquidity remains strong at INR45,950 crores, with net debt-to-EBITDA at 2.3x, providing financial flexibility for growth projects.
- Downstream portfolio momentum continued with tubes and tinplate businesses delivering strongest-ever Q1 performance, and digital platforms Aashiyana and DigECA achieving 61% year-on-year GMV growth.
- Consolidated EBITDA was impacted by unplanned cost increases of about INR1,200 crores due to the West Asia war, affecting energy, freight, and logistics costs.
- Netherlands operations were significantly impacted by the shutdown of the direct sheet plant (DSP) due to chrome emission exceedances, leading to lower volumes and profitability.
- India crude steel production was lower quarter-on-quarter due to scheduled shutdowns and operational issues, leading to higher conversion costs per tonne.
- UK safeguard measures are not fully aligned with industry needs, as quotas for certain products like galvanized steel and tubular sections remain high, limiting the intended protection.
- Netherlands faces regulatory and legal uncertainties, including a criminal investigation and stringent environmental standards that are technically challenging and without precedent, potentially affecting future investment decisions.
- Coking coal consumption costs are expected to rise in Q2, with India seeing a $5 per tonne increase and Netherlands a $10 per tonne increase, adding to cost pressures.
Ladies and gentlemen, good day, and welcome to the Tata Steel earnings call. (Operator Instructions) I would now like to hand the conference over to Ms. Samita Shah. Thank you, and over to you, ma'am.
Thank you, Shohan. Good afternoon, everyone, and welcome to this call to discuss our results for the first quarter FY27. We declared our results yesterday, and I hope you had a chance to go through the numbers. There's also a presentation which explains more details.
To explain -- to walk you through the results and answer any questions you may have, we have with us our CEO and Managing Director, Mr. T.V. Narendran; and our ED and CFO, Koushik Chatterjee. We will -- they will have -- share some opening comments, and then we will go into Q&A.
Before I hand it over to them, I just want to remind you all that the discussions today will be governed by the Safe Harbor clause, which is on page 2 of the presentation. Thank you, and over to you, Naren.
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