Tata Steel Q1 results: Net profit rises 51% to Rs 959.61 cr on lower costs

Weak demand weighed on steel prices, says firm's CEO & MD

Tata Steel on Wednesday reported a 51.4 per cent year-on-year (Y-o-Y) jump in consolidated net profit at Rs 959.61 crore in the first quarter ended June 2025 (Q1FY25) as operations in the Netherlands got back to normal operating levels. The net profit rise was also aided by lower expenses and lower raw material costs. The steel major’s net profit in the year-ago period stood at Rs 633.95 crore.

Total revenue on a consolidated basis was Rs 54,771.39 crore, down 7.9 per cent Y-o-Y. Both revenue and net profit fell short of the Bloomberg consensus estimate at Rs 56,339.70 crore and Rs 1,215.40 crore, respectively. Sequentially, revenue was down 6.7 per cent while net profit was up 56.9 per cent.

 

Tata Steel spent Rs 3,777 crore on capital expenditure during the quarter and its net debt stands at Rs 82,162 crore.

On July 25, a nine-judge Constitution Bench of the Supreme Court had ruled that states have the power to levy cess on mining and mineral-use activities. 

Referring to the judgment, Tata Steel said in its notes to results that clarity on the period of applicability of the levy, relating to its mines in Odisha, was pending. In line with previous years, the company has included the impact till June 30, 2024, aggregating to Rs 17,347 crore as contingent liability in its standalone and consolidated financial statements.

Domestic operations

Tata Steel India reported a turnover of Rs 33,194 crore in Q1FY25, compared to Rs 36,146 crore in Q1FY24. Reported profit after tax was at Rs 3,335 crore as against Rs 4,995 crore in the year-ago period.

TV Narendran, chief executive officer and managing director, said during the quarter, subdued steel demand across most regions weighed on global steel prices. “In India, steel demand was broadly stable despite some impact due to elections and heatwaves,” Narendran said.

In India, crude steel production was up 5 per cent Y-o-Y to around 5.3 million tons (mt). Deliveries at around 4.9 million tons were the “best-ever” Q1 sales led by 4 per cent Y-o-Y growth in domestic deliveries.

The 5 mtpa expansion project at Kalinganagar was on track for the blast furnace to start in September 2024.

Narendran also said that Tata Steel has launched the first carbon bank in India.

Tata Steel Europe

Tata Steel Netherlands recorded an Ebitda of Rs 453 crore in Q1FY25 compared to an Ebitda loss of Rs 1,173 crore in Q1FY24, on higher deliveries with the completion of reline of BF6 in early February.

Production was higher quarter-on-quarter (Q-o-Q) and Y-o-Y. Total revenue from operations of Tata Steel Netherlands, however, stood at Rs 14,167 crore in Q1FY25 compared to Rs 15,026 crore in Q1FY24.

Tata Steel UK’s Ebitda loss widened in Q1FY25 at Rs 955 crore compared to Rs 398 crore in the year-ago period. Revenue from UK operations stood at Rs 6,810 crore in Q1FY25 compared to Rs 7,738 crore in Q1FY24.

UK transition

Tata Steel said that it had safely ceased operations at one of the blast furnaces (BF Number 5) at Port Talbot and was on track to close the remaining blast furnaces by September 2024.

Koushik Chatterjee, executive director and chief financial officer, said: “With respect to the UK transition, we are proceeding as per previously announced timelines for the closure of the heavy end, a step which is critical to address the deep cash-burn associated with the upstream end of life assets.”

Chatterjee also said that the company was working closely with the recently elected UK government on finalisation of grant funding process for the new electric arc furnace projects.

“We have also started active engagement with the government in the Netherlands on support for the decarbonisation project,” he added.