Despite a likely decline in volumes due to plant maintenance and export headwinds, operating performance is projected to improve significantly. Losses from European operations are expected to moderate due to cost optimization, especially in the Netherlands. However, revenue growth is projected to remain tepid, with most brokerages forecasting a year-on-year and sequential decline.
Here’s what brokerages have projected:
PAT
- YES Securities: Rs 1,486 crore (up 55% YoY, up 14% QoQ)
- Nuvama: Rs 1,680 crore (up 26% YoY, down 1% QoQ)
- Kotak Equities: Rs 1,773 crore (up 35% YoY, up 5% QoQ)
- JM Financial: Rs 1,789 crore (down 27.3% YoY, up 43.6% QoQ)
Revenue
- YES Securities: Rs 54,116 crore (down 1.2% YoY, down 3.7% QoQ)
- Nuvama: Rs 51,691 crore (down 6% YoY, down 8% QoQ)
- Kotak Equities: Rs 50,515 crore (down 8% YoY, down 10% QoQ)
- JM Financial: Rs 54,208 crore (down 0.4% YoY, down 2.7% QoQ)
Nuvama attributed the 15% QoQ drop in sales volume (to 4.75 mt) to scheduled plant maintenance shutdowns and muted export demand. YES’ revenue projections assume a drop in volumes from Q4FY25. Kotak highlighted weak volume trends as a drag on topline despite better realizations.
EBITDA
- YES Securities: Rs 6,947 crore (up 61 bps YoY, up 117 bps QoQ)
- Nuvama: Rs 7,179 crore (up 7% YoY, up 9% QoQ)
- Kotak Equities: Rs 7,361 crore (up 10% YoY, up 12% QoQ)
- JM Financial: Rs 7,168 crore (up 11.9% YoY, up 6.7% QoQ)
On the margin front, YES expects the company to benefit from the rise in steel prices in India, while falling coking coal prices are likely to support EBITDA. Kotak attributes the improvement to lower coal costs and a 4% QoQ improvement in Indian realizations. Nuvama expects higher EBITDA per tonne, driven by better pricing and lower input costs in India.
EBITDA Margin
Kotak Equities estimates EBITDA margins at 14.6%, rising 234 bps YoY and 290 bps QoQ, supported by operating leverage and favorable commodity trends.
Europe Operations
Losses in Tata Steel Europe are expected to narrow QoQ. Nuvama estimates EBITDA at -$28/t, improving from -$39/t in Q4FY25, driven by lower raw material costs in the Netherlands. EBITDA per tonne is expected to rise to $38/t (vs $8/t in Q4FY25), while losses in the UK may shrink due to lower fixed costs.
Kotak estimates Europe to break even with $2/t EBITDA (vs -$36/t in Q4FY25), aided by $48/t EBITDA at Dutch operations and reduced losses in UK operations during the quarter.
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