Adding to the optimism, the company secured up to €2 billion in financing from the Dutch government for its IJmuiden-based steel plant, a key step in its European decarbonization plan.
But the deal isn’t fully sealed yet—political uncertainty in the Netherlands and the slow pace of coalition-building could delay final approvals, testing investor patience.
Beyond closing this financial package, Tata Steel must also meet two major goals: restoring profitability in its UK operations and scaling capacity in India to 40 million tonnes a year.
“The key focus in Europe will be on profitability across the UK and the Netherlands and understanding the challenges there, the path toward decarbonization, and the role of government support, including grants,” said Aditya Welekar, senior research analyst at Axis Securities.
India expansion push
The company first outlined its 40 million tons per annum (mtpa) capacity target in its FY23 annual report. Tata Sons’ chair N. Chandrasekaran reiterated the goal last year, committing around ₹10,000 crore annually in capex to achieve it by 2030.
Analysts, however, call the roadmap “ambitious but unclear.” Tata Steel’s immediate focus is to ramp up Kalinganagar to its full 8 mtpa capacity by end-2025 and scale up NINL (Neelachal Ispat Nigam Ltd) from 1 mtpa to 5 mtpa, pending regulatory clearances.
Once both projects are complete, total capacity will reach 31–32 mtpa, still short of its long-term target.
UK turnaround goal
At its FY25 annual general meeting, Chandrasekaran set another milestone—turning around the UK operations and delivering a net profit within the year.
Chief financial officer Koushik Chatterjee earlier told Mint that moving from Ebitda breakeven to net profit “would not take that long.”
However, Tata Steel pushed its breakeven guidance to the end of FY26 from the second quarter target, citing global trade disruptions and spillover effects of US tariff wars.
Given its European exposure, Tata Steel is expected to outperform peers this quarter. Its Netherlands operations should benefit from lower raw material prices, particularly coking coal and iron ore, which may cushion margins.
For these reasons, all eyes will be on Tata Steel’s July-September results, which will be announced on 12 November.
Mint lists the major areas to focus on in the company’s second-quarter results:
Revenue and profitability
Analysts at Systematix Institutional Equities expect consolidated revenue to rise 7% year-on-year and 8% sequentially to ₹57,640 crore, driven by higher volumes offset by lower steel prices.
According to the analysts, the margin expansion for the steelmaker will be supported by “superior sales mix, cost control measures, operational efficiency, and a steady growth in volumes, despite lower hot rolled coil steel prices.” Ebitda margin is expected to be around 14.2%, up from 11.4% in the same period last year.
However, investors can expect net sales realizations (NSR) to fall 4% due to lower steel prices. NSR is the average revenue earned per tonne of steel sold, after accounting for discounts and taxes.
European operations profitability
Investors will closely track the European business, where lower coking coal use is expected to boost Ebitda per tonne to $31 from $8, according to Axis Securities.
Motilal Oswal analysts expect the European segment to stay profitable, but say management commentary on the region’s outlook is critical.
Analysts will also continue to monitor updates on the progress of the new electric arc furnace at Port Talbot and whether it remains on track for commissioning by the end of FY27.
On the Dutch operations, investors will seek commentary on what is the final project cost of decarbonizing the IJmuiden plant, and how far along they are on completing the detailed engineering design. A key concern for analysts is how will they manage timings ensuring the British and Dutch plants aren’t shut down at the same time.
Demand and pricing
A weak monsoon and oversupply dragged down steel prices through the September quarter, with little rebound so far. Any signs of demand recovery or price improvement will be closely watched.
The temporary 12% safeguard duty on steel imports expired last week, and investors await clarity on a new staggered duty recommended by the DGTR to support local producers.
Globally, analysts will look for management’s take on the EU’s Carbon Border Adjustment Mechanism—whether it will aid or challenge Tata Steel’s competitiveness in Europe.
