Tata Steel Q1 results preview: Net profit may fall 3-7%, sales may grow in double digits

Tata Steel Ltd is expected to report a single-digit degrowth in net profit for the June quarter on a double-digit growth in sales. Analysts said Tata Steel Europe's performance should be impacted by part shutdown of Netherlands rolling mill, even as UK business is expected to improve profitability given higher realisation.

Ambit Institutional Equities expects Tata Steel to report 6 per cent YoY fall in net profit at Rs 1,974 crore for the quarter on 15 per cent rise in sales at Rs 61,408 crore. Ebitda is seen rising 24 per cent YoY to Rs 9,210 crore while Ebitda margin is seen expanding to 15 per cent from 14 per cent YoY.

"UK business is expected to improve profitability given higher realisation. While TSN should be negatively impacted by DSP production disruption. Indian business Ebitda/t to expand by Rs 2,500/t, led by higher realisations & higher coking coal costs," Ambit Institutional Equities said.

Kotak Institutional Equities sees Q1 net profit falling 2.5 per cent to Rs 2,026 crore. On adjusted basis, it sees profit falling 7.3 per cent YoY. "We estimate Europe to report EBITDA loss of $15/ton ($2/ton in 4QFY26) with decline in Dutch Ebitda to $7/ton ($42/ton in 4QFY26) on disruption in downstream capacities and UK losses at US$79/ton ((-)US$129/ton in 4QFY26)," it said.

Antique Stock Broking said Tata Steel's standalone volume is expected to be 8 per cent higher YoY, aided by ramp up at Kalinganagar. Europe's steel sales volume is expected to be 10 per cent lower YoY. On a consolidated basis, net profit is seen falling 7.3 per cent YoY to Rs 2,048 crore on 10.9 per cent YoY rise in sales at Rs 58,986 crore. "Consolidated Ebitda is expected to improve 23.6 per cent YoY to Rs 9,180 crore aided by higher realization partly subdued by higher coking coal costs, it said.

Axis Securities is modelling in higher consolidated sales volume on a YoY basis, while decline on a QoQ basis at 8.3 MT. It noted that steel HRC prices increased 9 per cent YoY.

"We expect consolidated revenue to increase YoY/QoQ led by higher steel sales volumes and HRC prices. EBITDA to improve
YoY led by higher steel production and NSRs at India. QoQ Ebitda likely to decline led by higher coking coal prices at India and TSN along with lower volumes at TSN," it said.