Tata Steel Q3 FY25 Profit Falls to ₹295 Crore, India Deliveries Hit Record High

Introduction

Tata Steel Limited announced its financial results for the third quarter of fiscal year 2025, ending December 31, 2024, revealing a mixed performance. The company reported a consolidated net profit of ₹295.49 crore, a sharp decline from previous periods. This downturn was largely influenced by persistent challenges in its European operations and broader global economic pressures. However, the steel major's domestic business in India demonstrated remarkable resilience, achieving its best-ever quarterly deliveries and crossing the six million ton milestone for the first time.

Consolidated Financial Performance

For Q3 FY25, Tata Steel's consolidated revenue from operations stood at ₹53,648.30 crore. This figure represents a slight sequential dip from ₹53,904.71 crore in Q2 FY25 and a 3% year-on-year decline from ₹55,311.88 crore in Q3 FY24. The total income for the quarter was ₹53,869.33 crore.

The most significant change was observed in the company's profitability. The net profit of ₹295.49 crore marked a substantial decrease from the ₹758.84 crore reported in the preceding quarter and the ₹522.14 crore earned in the corresponding quarter of the previous fiscal year. The consolidated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin for the quarter was 11.17%, compared to 11.55% in Q2 FY25 and 11.45% in Q3 FY24, reflecting the pressure on margins.

India Operations: A Pillar of Strength

Despite the consolidated downturn, Tata Steel's Indian operations delivered a robust performance. The company achieved its highest-ever quarterly deliveries, reaching 6.04 million tons, an increase of 14% year-on-year. This growth was fueled by strong domestic demand and improved production capabilities. For the first nine months of FY25, deliveries from India rose by 6% year-on-year to 16.3 million tons.

Several key business verticals contributed to this success. The 'Automotive & Special Products' segment recorded its best-ever volumes of approximately 0.9 million tons, a 20% YoY increase. The 'Branded Products & Retail' vertical also surpassed the 2 million ton mark for the first time, with volumes growing 12% YoY. Furthermore, the company's e-commerce platforms, Tata Steel Aashiyana and DigECA, generated a Gross Merchandise Value (GMV) of ₹2,380 crore, up 68% year-on-year.

European Operations and Global Challenges

In contrast to the strong domestic performance, Tata Steel's European business continued to face significant headwinds. Revenue from European operations was ₹18,491.24 crore for the quarter. The UK business, in particular, is undergoing a major restructuring, including the shutdown of heavy-end assets, which has impacted production. Deliveries from the UK stood at 0.52 million tons. In the Netherlands, liquid steel production was 1.68 million tons, with deliveries at 1.40 million tons, affected by seasonal factors and subdued market dynamics.

Management Commentary

CEO & MD, T.V. Narendran, commented on the results, stating that the global operating environment remains complex due to geopolitical factors and an economic slowdown in key regions. He highlighted that high steel exports from China, averaging around 9 million tons per month in 2024, have exerted downward pressure on steel prices globally, including in India. Despite these challenges, Narendran emphasized the company's progress on its growth plans in Kalinganagar and its commitment to strengthening its position in value-added product segments.

Capital Expenditure and Debt

The company continued its strategic investments, with capital expenditure for the quarter amounting to ₹3,868 crore. The total capex for the nine months ending in December 2024 reached ₹12,450 crore. On the financial health front, Tata Steel successfully reduced its net debt by approximately ₹3,000 crore during the quarter, bringing the total net debt down to ₹85,800 crore.

Conclusion

Tata Steel's Q3 FY25 results paint a picture of a company navigating a challenging global market while leveraging its strong domestic foundation. The record-breaking performance of its Indian operations provides a crucial buffer against the difficulties faced in Europe. The company's focus on strategic projects, such as the expansion at Kalinganagar, and its efforts in debt reduction position it to manage ongoing market uncertainties. Future performance will likely depend on the stabilization of European operations and the continued strength of the Indian market.