Despite the setback, the executives expressed confidence about the company’s broader international strategy, including securing Dutch government support to decarbonize its Netherlands operations, and defended its capacity expansion plans in India amid global concerns of steel overcapacity.
India’s second-biggest steelmaker by capacity had earlier guided for an Ebitda (earnings before interest, tax, depreciation and amortization) breakeven in the UK by the end of the second quarter of FY26. The new target is the final quarter of this fiscal year.
In its April-June quarter results announced on Thursday, Tata Steel reported that its UK operation’s Ebitda loss narrowed to £41 million in the June quarter of this fiscal compared to £80 million reported in the last quarter of FY25.
The company’s chief executive officer T.V. Narendran said while there was a delay in achieving Ebitda breakeven due to the direct and indirect effects of the tariffs announced by US President Donald Trump, the company was moving in the right direction.
“Because of tariffs, our exports to the US (from the UK) are impacted,” Narendran said. Even the company’s customers like British carmakers were facing the heat from the tariffs, compounding the business impact for Tata Steel, he added.
An influx of steel from other countries also made a difference. “Japanese and Korean steel, which would have otherwise gone to the US, is looking for alternate markets. It came to the UK because the UK has not been as fast as the EU in setting tighter quotas for imports,” the chief executive said.
Chief financial officer Koushik Chatterjee added that the journey from Ebitda breakeven to net profit breakeven for Tata Steel UK would not take that long.
“The good thing is that there is no tax implication in the UK because we have a huge amount of unabsorbed tax losses. The asset value is low, so the depreciation is low and debt is mostly working capital,” said Chatterjee. “So once we get to Ebitda positive with sufficient cushion, it’s not a big ask (to achieve net profit),” he said.
Earlier this month, at the Tata Steel annual general meeting, Tata Sons chairman N. Chandrasekaran set a new goal of achieving net profit from the company’s UK operations in the current fiscal year.
“I feel that the UK should be PAT (profit after tax) positive, so the company is working towards making it profitable,” said Chandrasekaran, who echoed shareholder concerns. “We expect the UK this year to perform much better than last year and it will definitely be Ebitda positive.”
Tata Steel shares closed 2.12% lower on Thursday on the BSE at ₹157.92, underperforming the benchmark Sensex, which fell 0.36% on the stock exchanges.
The Netherlands’ Scenario
Meanwhile, the steelmaker said its negotiations with the Dutch government were progressing well for fiscal support to overhaul its steelmaking operations in the Netherlands towards more environmentally sustainable processes. It plans to replace two blast furnaces over the coming years with electric arc furnaces (EAFs)–like it did in the UK–to cut emissions.
All stakeholders, including Tata Steel India, Tata Steel Netherlands, the Dutch government, and the local provincial government will soon sign a non-binding letter of intent. That will be followed by a binding agreement once the Netherlands elects a new government later this year.
“Even though the current Dutch government has fallen and elections are scheduled for October, our project is part of a Parliament-endorsed initiative. That allows us to continue negotiations and proceed with the non-binding agreement,” said Chatterjee.
The agreement on the blast furnaces involves two phases. During phase one, the company will install an EAF and then shut down one blast furnace. The second phase is planned for the mid-2030s when the remaining blast furnace will be shut. Blast furnaces are large units that use the heat from coke to convert iron ore into purified molten metal for further processing into steel. EAFs do this process using electricity without any coke, thus cutting emissions.
India needs more capacity
The oldest steelmaker in Asia responded to theNew York Times’claim that there was oversupply of steel in the world and that Tata Steel’s operations were suffering due to this overcapacity. The two executives defended the company’s strategy to expand capacity.
“The larger question isn’t about overcapacity,”said Narendran. “It’s about where that capacity exists and whether it’s in a competitive geography. For a country like India, which will consume 500 million tons of steel, should we really import 300 million tons from China? And what happens if China stops supplying tomorrow?”
Steel is a strategic resource for national infrastructure, automotive, defence, and capital goods sectors, making self-sufficiency critical, Narendran pointed out. “Even Europe, which was unsure about keeping its steel industry alive, now wants to retain capacity,” he said. “Every geography wants to ensure it can meet its own demand.”
The top executive questioned why high-cost steel producers like Japan and South Korea export significant volumes of steel despite lacking cost or raw material advantages. “At least China offers cheap steel. But why should Japan or Korea be exporting steel when they’re not low-cost producers?” he said.
According to Chatterjee, overcapacity discussions, particularly by Organization for Economic Co-operation and Development (OECD), often ignore ground realities. “Europe and the US de-industrialized by outsourcing to China,” he said. “Now, with changing global priorities like supply chain security and carbon taxes, countries are reassessing. For India, with its abundant raw materials, skilled labour and growing infrastructure needs, not building capacity would be foolish.”
The issue of overcapacity exists in regions where it’s no longer needed. Rationalizing it globally is the real issue. Steel should be produced where it’s most competitive, said Chatterjee.
