Deservedly so.
Chandrasekaran shared the performance record of both listed and privately held group companies for the last five fiscal years, which showed the carmaker recorded a 69% revenue increase between 2019-20 and 2024-25.
The top commercial vehicle maker’s 955% stock-market return ranks among the best within the group. Tata Power Co. Ltd was the top-performing entity, with its shares delivering a return of 1,250%.
That makes Tata Steel’s impressive 529% return look a shade paler.
But the performance of the country’s second-largest steelmaker (behind JSW Steel Ltd) is no less commendable. This is especially true as the steel giant nears turning its loss-making European operations profitable, a vision shared by Chandrasekaran at the company’s shareholder meeting in June.
Higher steel prices surely helped the company. But credit also goes to the company’s senior management, led by chief executive T.V. Narendran, who took over the top post eight months after Chandrasekaran assumed the role of Tata Sons chairman in February 2017.
Still, Tata Steel’s performance over the next 18 months will determine whether it can turn its UK operations profitable by September 2026. The US President Donald Trump-led tariff war and consequent global uncertainty could lead to a correction in steel prices, nullifying the management’s efforts.
For this reason, all eyes will be on the company’s June-quarter results to be announced on 30 July.
In the first three months of 2025-26, steel prices rose quarter-on-quarter but were slightly lower year-on-year. Hot-rolled coil (HRC), used in automobile parts and consumer durables, was sold for approximately ₹52,000 per tonne, and rebar, used in infrastructure and housing, for around ₹56,600, according to Antique Stock Broking analysts.
Prices had recovered from January lows but dropped about 3% recently due to seasonal factors, as early rains led to slower construction. Rebar is selling at a higher price than HRC, which is good for companies such as Jindal Steel and Power Ltd that make more long steel. HRC prices are also higher than Chinese imports, even after including the 12% import tax, pressuring domestic steelmakers, said the brokerage’s 5 June report.
Mint lists five major areas to focus on in the company’s first-quarter results:
Revenue and profitability: Analysts at Systematix Institutional Equities expect Tata Steel’s revenues to decline 7% on-year to ₹50,700 crore on weak demand and profits to rise by 72% to ₹1,580 crore due to an increase in steel prices. However, the companies in the sector are likely to report a 20% on-year Ebitda growth led by better cost efficiency, operating leverage, and better steel prices, said the 11 July report. Ebitda is short for earnings before interest, taxes, depreciation, and amortization.
Demand and prices: Given the rise in steel prices, coupled with lower input costs, domestic steel producers such as Tata Steel are likely to report an improved Ebitda/tonne in Q1FY26 compared to Q4FY25. Domestic steel prices rebounded during the quarter due to the government’s 12% safeguard duty.
Analysts at Systematix Institutional Equities believe India will continue to be the growth engine for the ferrous sector. They also expect the safeguard duty to be extended beyond its 200-day period to continue protecting local producers.
European operations profitability: The key focus for investors would be Tata Steel’s overseas operations, where improved steel prices in Europe are likely to help narrow losses in the UK. Ebitda per tonne is expected to rise to $103, indicating early signs of a turnaround.
Cost reduction and margin expansion: The steelmaker achieved ₹6,600 crore in cost savings in 2024-25. The management commentary in the March quarter suggested higher margins across geographies, supported by the 12% safeguard duties and a drop in coking coal prices for the next fiscal year, with a further cost reduction target of ₹11,500 crore in India and Europe. At least one of the brokerage firms said the cost-saving targets are ambitious, and they would factor in only partial cost benefits.
Commentary on margin expansion due to safeguard duties and cost cuts would be a key factor to watch.
Outlook: Analysts do not expect the India-UK free trade agreement to have any significant impact as the UK’s business primarily sources its raw materials from the Netherlands. Tata Steel’s outlook for 2025-26 hinges on aggressive cost takeouts and margin recovery. However, the steelmaker is expected to see a squeeze in margins in the next quarter, more than their peers, as prices of both steel and iron ore are on a downward trend. This is because of the fixed costs associated with their mines, which help them earn better margins when things are going well but become a burden during a slowdown.
