Equities. Commodities. Metals & Mining

Rahul Jain

Equity Bottom-Up

<ul>
<li>Tata Steel’s India business is poised for multi-year volume expansion, backed by ample land availability across three key locations. </li>
<li>Losses from UK and Netherland operations set to ease. UK operations are under transitioning phase from BF to EAF. Discussions are on with the Netherlands govt. </li>
<li>Valuations: Tata Steel trades at 6.5x EV/EBITDA based on estimated FY26 EBITDA. Stock has outperformed local indices and could likely continue. </li>
</ul>


Tata Steel’s India business is poised for multi-year volume expansion, backed by ample land availability across three key locations. 
Losses from UK and Netherland operations set to ease. UK operations are under transitioning phase from BF to EAF. Discussions are on with the Netherlands govt. 
Valuations: Tata Steel trades at 6.5x EV/EBITDA based on estimated FY26 EBITDA. Stock has outperformed local indices and could likely continue. 


Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

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<ul><li>Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in line with our estimate.</li><li>Sales volume grew 8% YoY to 5.29 MT. Neelachal EBITDA grew impressively by 67% QoQ, and it is currently operating at rated capacity.</li><li>Cost at KPO-II will come as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in line with our estimate.Sales volume grew 8% YoY to 5.29 MT. Neelachal EBITDA grew impressively by 67% QoQ, and it is currently operating at rated capacity.Cost at KPO-II will come as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>Tata Steel’s Q2/24-25 results were acceptable and in line with expectations.</li>
<li>The operating environment remains challenging due to surging exports from China, which have weighed on steel prices.</li>
<li>The company's earnings improved y-o-y but declined q-o-q.</li>
</ul>


Tata Steel’s Q2/24-25 results were acceptable and in line with expectations.
The operating environment remains challenging due to surging exports from China, which have weighed on steel prices.
The company's earnings improved y-o-y but declined q-o-q.


<ul><li>Indian operations strong while Europe drags: In FY25, consolidated sales volume is expected to increase by 1-1.4MT, led by 1.1MT from KPO-II, 0.2MT from NINL, partially offset by the shutdown at one of the BF at Jamshedpur for relining in Q4.</li><li>Indian profitability will improve as the KPO-II ramps up and will add 3.5-4MT/5MT in FY26/27.</li><li>Cost at KPO-II will come down by ~Rs 3-4k/t as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Indian operations strong while Europe drags: In FY25, consolidated sales volume is expected to increase by 1-1.4MT, led by 1.1MT from KPO-II, 0.2MT from NINL, partially offset by the shutdown at one of the BF at Jamshedpur for relining in Q4.Indian profitability will improve as the KPO-II ramps up and will add 3.5-4MT/5MT in FY26/27.Cost at KPO-II will come down by ~Rs 3-4k/t as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tata Steel - Europe Continues to Drag; Caps Material Upside

<ul>
<li>The ramifications of his leadership style, characterised by unpredictability and a focus on national interests, will likely resonate across various sectors globally, affecting everything from trade and security alliances to domestic civil liberties and economic stability.</li>
<li>The three most crucial policy changes in the US will likely be: [1] the escalation of tariffs; [2] sweeping tax cuts; and [3] the mass deportation of migrants.</li>
<li>Given that this will be Mr Trump's second term, he can be expected to be up and running fast.</li>
</ul>


The ramifications of his leadership style, characterised by unpredictability and a focus on national interests, will likely resonate across various sectors globally, affecting everything from trade and security alliances to domestic civil liberties and economic stability.
The three most crucial policy changes in the US will likely be: [1] the escalation of tariffs; [2] sweeping tax cuts; and [3] the mass deportation of migrants.
Given that this will be Mr Trump's second term, he can be expected to be up and running fast.


India

Tata Steel Ltd. is an integrated steel producer which manufactures a variety of steel products. The Company's products include steel ball bearing rings, alloy steel bearing rings, annular forgings, flanges, bearings, welded steel tubes, cold rolled strips and seamless tubes. Tata Steel also manufactures metallurgical machinery.

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Tata Steel Ltd (TATA IN)

Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...

Rahul Jain

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in...

Axis Direct

Tata Steel - Acceptable Numbers

Tata Steel’s Q2/24-25 results were acceptable and in line with expectations.The operating environment remains challenging due to surging exports...

Lucror Analytics

Tata Steel - Europe Continues to Drag; Caps Material Upside

In FY25, consolidated sales volume is expected to increase by 1-1.4MT, led by 1.1MT from KPO-II, 0.2MT from NINL partially offset by the shutdown...

Axis Direct

Lucror Analytics - Morning Views Asia

Donald Trump has been elected the 47th president of the US, with his return to the White House set to significantly reshape both domestic policies...

Lucror Analytics

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52-week Range

Market Cap (USDm)

P/E

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Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

​Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...

Rahul Jain

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in...

Axis Direct

Tata Steel - Acceptable Numbers

Tata Steel’s Q2/24-25 results were acceptable and in line with expectations.The operating environment remains challenging due to surging exports...

Lucror Analytics

Tata Steel - Europe Continues to Drag; Caps Material Upside

In FY25, consolidated sales volume is expected to increase by 1-1.4MT, led by 1.1MT from KPO-II, 0.2MT from NINL partially offset by the shutdown...

Axis Direct

Lucror Analytics - Morning Views Asia

Donald Trump has been elected the 47th president of the US, with his return to the White House set to significantly reshape both domestic policies...

Lucror Analytics

Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...