India: Tata Steel reports stable production, 3% q-o-q rise in sales in Q2FY'25

• Crude steel output stable q-o-q
  
  
• Exports surge 21% q-o-q
  
  

Tata Steel's crude steel production remained flat q-o-q, while sales rose 3% q-o-q in Q2FY'25. The company spent INR 4,806 crore on capital expenditure (capex) during the quarter and INR 8,583 crore during H1FY'25. The steel major aims to achieve net-zero carbon emissions by 2045.

Project updates

• A 5-MTPA blast furnace was commissioned at Kalinganagar in September 2024.
  
  
• The second blast furnace at Kalinganagar is progressing well in its ramp-up phase, with associated facilities, including the continuous annealing line and air separation unit, expected to be commissioned later this year. Additionally, the company has placed equipment orders for its 0.85-MTPA electric arc furnace plant in Ludhiana.
  
  

Production stable q-o-q: Tata Steel's crude steel production remained stable q-o-q at 5.28 mnt in Q2FY'25. However, the same rose 5% as compared with 5.02 mnt in the corresponding period last year (CPLY).

Sales up q-o-q: The company's sales increased by 3% q-o-q to 5.11 mnt in Q2FY'25 from 4.94 mnt in Q1FY'25. The same rose 6% y-o-y against 4.82 mnt in Q2FY'24.

Export volumes rose 21% to 0.23 mnt in Q2FY'25 as compared with 0.19 mnt in the previous quarter. Volumes were up by 15% y-o-y from 0.2 mnt in the CPLY.

EBITDA edges down q-o-q: Tata Steel's earnings before interest, tax, depreciation and amortisation (EBITDA) edged down by 2% q-o-q to INR 6,889 crore in Q2FY'25 as compared with INR 7,037 crore in the preceding quarter. On a y-o-y basis, the same rose 6% as against INR 6,459 crores in the CPLY.

Net realisations guidance: Net realisations are expected to be INR 2,000/t lower in Q3FY'25 as against Q2, majorly due to higher steel prices in July, which then dropped till September. Steel demand was impacted by the monsoon and lower expenditure by the government due to elections. Going forward, the company expects reasonably strong demand in H2, said TV Narendran, CEO and Managing Director, Tata Steel, in the company's investors call.

Raw material prices decline q-o-q: Coking coal prices declined by 14% during the quarter. Coking coal prices are expected to be $20/t lower in terms of consumption in Q3FY'25 as compared with Q2. Meanwhile, iron ore prices moved below $90/t, before recovering and rising to above $100/t.

Raw material expenses were lower, primarily driven by a decline in coking coal consumption costs.

Note: All figures mentioned are for India (India includes Tata Steel Standalone and Neelachal Ispat Nigam Limited).