Tata Steel has released the transcript for its Third Quarter FY2026 Earnings Discussion held on February 6, 2026. CEO & MD T.V. Narendran noted consistent performance amid a complex global environment, with consolidated EBITDA margin improving by 300 basis points YoY for the nine months ended December 31, 2025. The company remains committed to India’s growth strategy while actively transitioning UK and Netherlands operations towards sustainability.
3QFY2026 Financial Highlights and Strategy Update
Tata Steel provided the transcript for its 3QFY2026 Earnings Discussion, covering results for the quarter and nine months ended December 31, 2025. The company emphasized its consistent performance despite macro uncertainty, primarily driven by strong execution in India and ongoing cost transformation initiatives.
India Performance Anchor
India remains the core growth market, evidenced by crude steel production rising about 12% QoQ and YoY to approximately 6.34 million tons in the quarter. Quarterly deliveries surpassed 6 million tons for the first time in India. This operational ramp-up, coupled with cost optimization, delivered a 23% EBITDA margin for the quarter. The company highlighted record volumes for the Automotive & Special Products business, with the auto downstream mix now exceeding 50% of the nine-month sales level.
The company is investing in capacity and sustainable practices, recently consolidating its stake in the color-coated business and acquiring 50.01% in Thriveni Pellets Private Limited.
European Operations Transformation
In the UK, deliveries stood at 0.5 million tons, down QoQ due to subdued demand. The team has achieved cost savings of over £400 million in the last two years. Management expressed hope for timely revisions to the UK steel safeguard measures, which are due to expire in June 2026.
In the Netherlands, liquid steel production was stable at 1.7 million tons. Lower realizations were offset by cost improvements. The company commissioned a new packaging steel line using patented Trivalent Chromium Coating Technology.
Nine-Month Consolidated Financials
For the nine months ended December 31, 2025:
- Consolidated EBITDA increased by 31% YoY to Rs. 24,894 crores (up from Rs. 19,040 crores in the prior corresponding period).
- EBITDA margin expanded from 12% to 15%.
- The cost transformation program achieved savings of Rs. 8,600 crores across geographies.
- Operating cash flows before capex were approximately Rs. 20,500 crores, resulting in a Free Cash Flow of Rs. 5,640 crores.
- Net debt stands at approximately ~2.6x EBITDA, well within the target range of below 3x.
Q&A Insights: Pricing and Future Growth
European Pricing and CBAM
Management confirmed that rising European prices reflect reduced imports due to announced quotas and the impact of CBAM. They anticipate European prices moving closer to US steel prices over time. Regarding pricing contracts in the Netherlands, while they expect overall price improvements over the full year (potentially €100/t), Q4 QoQ revenue realization saw a reduction of €30-33/t due to a shift in product mix, though cost takeouts are expected to offset this.
Indian Growth and Capacity
Tata Steel continues capacity expansion planning, sequencing new projects starting with NINL, followed by the 2.5 MTPA at Meramandali, and then the Maharashtra greenfield. The company is shifting focus to attractive downstream segments, aiming for market share in these areas to be at least twice its overall market share (targeting 40%+), focusing on wires and tubes.
UK Profitability Outlook
The UK operations remain challenging, requiring government action on import quotas. Management stated that an increase in the steel spread by about £100/t relative to current levels would be required to achieve EBITDA neutrality.
Coking Coal Costs
For India in Q4, the consumption cost for coking coal was expected to be about $15/t higher QoQ, though purchase costs were higher by $22/t, with stock movements accounting for the difference.
Long-Term Projects
The company is progressing with the 3 MTPA scrap-based Electric Arc Furnace (EAF) in the UK. Regarding the Hisarna pilot project, Tata Steel confirmed that while Nucor is involved in discussions, the plan is to set up the plant in Jamshedpur, leveraging its potential for CO2 capture and utilization flexibility.
Source: BSE
