Tata Steel Q2 earnings preview: Revenue pegged at Rs 64,152 crore, stock trading flat

Tata Steel shares were trading on a flat note on Friday, a day ahead of the September quarter earnings of the metal major.  Brokerage Nuvama terms Tata Steel stock among its top picks. It says that standalone adjusted EBITDA/tonne is likely to fall by Rs 1,600 QoQ to Rs 16,594 owing to decrease in blended steel realisation/tonne (down Rs 600/tonne QoQ), increase in coking coal cost by $10/tonne QoQ and higher other expenses.

Sales volume is likely to increase by 15% QoQ to 5.97 mt. Tata Steel Europe EBITDA/t to report positive EBITDA from loss in Q1FY27 ($7/tonne versus -$17/tonne in Q1FY27) driven by higher prices and lower cost in Netherlands, partly offset by higher losses in the UK. Consolidated adjusted EBITDA to increase by 11% QoQ to Rs 10400 crore. "We factor in Netherlands EBITDA/t of $60 (Q1: $3/t) while UK EBITDA/t loss of $176 (Q1 loss of USD75/t)," said Nuvama.

HDFC Securities has a buy call on the Tata Steel stock with a price target of Rs 210, an upside of 25%.

The stock can be bought in a range of Rs 168–175 .

HSBC has a Buy call on the metal stock with a target price of Rs 260. Steep increase in valuation discount against peers is unwarranted. Investor concerns centre around post 2030 India profitability, Netherlands issues, potential loss of market share in India, said the brokerage adding that India business should remain strong, leading to lower debt.

According to Bloomberg Consensus estimates, net income in Q2 is expected at Rs 3,254 crore. Parent net profit is estimated at Rs 4,576 crore. Revenue is estimated at Rs 64,152 crore. Tata Steel's India Revenue estimate is at Rs 41,588 crore.

Tata Steel Europe revenue is estimate a Rs 21750 crore, according to Bloomberg estimates. EBITDA is estimated to reach Rs 10,007 crore.

In the current session, Tata Steel shares were trading 0.44% lower at Rs 181.20. Market cap of the firm stood at Rs 2.26 lakh crore.