Tata Steel clarifies on 'Dutch may pay as much as €3 billion' report; stock up 3%

Tata Steel Ltd on Thursday issued a clarification over a news report titled "Dutch May Pay as Much as €3 Billion to Clean Up Tata Steel Plant". "In this connection, as was disclosed in the financial results for the year and quarter ended March 31, 2024, the company is in discussions with the Dutch government on the proposed decarbonization roadmap," it stated.

"The Dutch Parliament, in March 2024 formally gave a mandate to the Government to negotiate the terms of potential support towards a proposal for decarbonization in Tata Steel Nederland. Subsequently, the Dutch government has formulated a detailed framework of diligence, analysis, discussions and negotiations with Tata Steel which will run over several months before potentially culminating in an agreed set of terms. These terms will then require approval from the Netherlands Parliament as well as the Board of Tata Steel," Tata Steel mentioned.

It may be premature to draw any final conclusions at this time and hence the company is not in a position to comment any further on the news report, it further said.

Tata Steel's stock was last seen trading 2.69 per cent higher at Rs 173.75.

The steel maker's Q4 earnings surprised the Street negatively as domestic steel prices remained under pressure, with India importing higher volumes of finished steel from producers in China.

Shreyansh Shah, Research Analyst at StoxBox said while the steelmaker reported a profit, it missed market estimates. "The rising coking coal prices acted as a dampener to the company’s performance. The company’s growth in revenues was led by high volumes that can be attributed to an uptick in steel demand fuelled by heavy infrastructure spending, but higher coking coal costs and the loss at its foreign subsidiaries weighed on the gains. The company's expansion is in line, and we believe that once the pain of its subsidiaries in the western part is accounted for, it will have a healthy financial performance in the long term," he stated.

Prabhudas Lilladher suggested 'accumulate' rating on the stock. The brokerage said Tata Steel's Q4 FY24 consolidated Ebitda grew 5 per cent QoQ to Rs 6,600 crore, better than its estimate of Rs 6,200 crore on strong operating performance from India operations.