Tata Steel Q2 Results: EBITDA Jumps 46% to Rs 9,106 Crore

Introduction

Tata Steel Ltd. has reported a resilient financial performance for the second quarter of fiscal year 2026, navigating a challenging global environment marked by geopolitical tensions and trade tariffs. The company announced a consolidated EBITDA of Rs 9,106 crore for the quarter ended September 30, 2025, marking a significant 46% year-on-year (YoY) and 22% quarter-on-quarter (QoQ) increase. This growth was primarily driven by strong volume expansion and operational efficiency in its India business, which helped offset subdued performance in its European operations.

Consolidated Financial Performance

For the second quarter, Tata Steel's consolidated revenues stood at Rs 58,689 crore. The standout figure was the consolidated EBITDA, which reached Rs 9,106 crore, translating to an EBITDA margin of approximately 16%. On a per-ton basis, the EBITDA was Rs 11,518. For the first half of the financial year (H1FY26), the company recorded a consolidated EBITDA of Rs 16,585 crore on revenues of Rs 1,11,867 crore, reflecting a margin of around 15% and a 27% YoY improvement.

Mr. Koushik Chatterjee, Executive Director and CFO, attributed this performance to the company's sharp focus on its cost transformation program, which yielded savings of around Rs 2,561 crore during the quarter and Rs 5,450 crore for the half-year. This disciplined approach to cost management has been crucial in improving margins despite external pressures.

India Operations Lead the Growth

The company's India operations were the primary engine of growth during the quarter. India revenues reached Rs 34,787 crore, with an EBITDA of Rs 8,654 crore, resulting in a robust EBITDA margin of 25%. Crude steel production in India increased by 8% QoQ to 5.65 million tons, while deliveries saw an even stronger surge of 17% QoQ to 5.55 million tons. This growth was supported by the successful normalisation of operations at the Jamshedpur plant following a blast furnace relining.

Mr. T V Narendran, CEO & Managing Director, highlighted the strength of the company's marketing franchise, which enabled effective scaling of deliveries. The retail brand, Tata Tiscon, grew by 27% QoQ, reinforcing the company's leadership in the engineering and construction solutions segment. Furthermore, the company's e-commerce platforms, Aashiyana and DigECA, achieved a Gross Merchandise Value (GMV) of Rs 1,980 crore for the quarter, more than tripling on a YoY basis.

Performance of European Operations

Tata Steel's European operations presented a mixed picture. The Netherlands business showed signs of recovery, with revenues of EUR 1,551 million and an EBITDA of EUR 92 million, up from EUR 64 million in the previous quarter. Liquid steel production was 1.67 million tons, and deliveries stood at 1.54 million tons. The company is making progress in restoring the competitiveness of its Netherlands operations.

In contrast, the UK business continued to face headwinds. UK revenues were GBP 505 million, but the business recorded an EBITDA loss of GBP 66 million, an increase from the GBP 41 million loss in the preceding quarter. The company cited subdued prices and UK safeguard quotas exceeding demand as key reasons for the decline. Deliveries in the UK were 0.57 million tons.

Strategic Developments and Capital Management

During the quarter, Tata Steel remained focused on strategic growth and prudent financial management. The company spent Rs 3,250 crore on capital expenditure, bringing the total for the half-year to Rs 7,079 crore. These investments are directed towards capacity expansion, such as the new 0.5 MTPA combi mill at Kalinganagar, which will strengthen its presence in the specialty steel segment.

On the debt front, the company made significant strides in optimizing its portfolio. Consolidated gross debt was reduced by approximately Rs 3,300 crore QoQ to Rs 95,643 crore. A notable achievement was the reduction of TSUK debt by £540 million during the quarter. In a key strategic move to grow its downstream portfolio, Tata Steel signed an agreement to acquire the remaining 50% stake in Tata BlueScope Steel Private Limited, making it a wholly-owned subsidiary.

Decarbonisation and Sustainability Focus

Tata Steel continues to prioritize its transition towards environmentally viable operations. In September 2025, the company signed a non-binding Joint Letter of Intent with the Government of the Netherlands and the Province of North-Holland for an integrated health and decarbonisation project. In the UK, the Electric Arc Furnace (EAF) project at Port Talbot has received planning permission, with site activities scheduled to begin. These initiatives are aligned with the company's broader goal of achieving Net Zero by 2045.

Management Outlook

The management maintains a cautiously optimistic outlook. While the global operating environment remains challenging, the company's focus on volume growth in India, strengthening raw material linkages, and disciplined capital allocation is expected to sustain performance. Mr. Narendran stated, “We remain focused on transitioning our UK and Netherlands businesses to economically and environmentally viable operations.” The company will continue to monitor policy developments in the EU and UK to optimize its decarbonisation capital expenditure, ensuring it remains affordable for all stakeholders.

Conclusion

Tata Steel's Q2FY26 results demonstrate a strong performance led by its domestic operations, which successfully countered the challenges in the global market. The significant improvement in EBITDA, coupled with strategic cost savings, debt reduction, and key acquisitions, positions the company for sustained growth. The ongoing focus on expanding its high-end product portfolio and advancing its decarbonisation projects underscores its commitment to long-term value creation and sustainability.