Cholamandalam Investment and Finance Company Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Tata Steel delivered strong operational performance in Q2 FY2026 with significant volume growth and margin expansion in India operations. Despite global headwinds from Chinese exports and pricing pressures, the company maintained disciplined execution of its cost transformation program while advancing strategic initiatives including downstream consolidation and European decarbonisation planning.

Highlights

  • Strong improvement in EBITDA margin to 15% in H1 FY2026, up 280 bps YoY

  • India crude steel production rose 8% QoQ and 7% YoY to 5.65 million tons

  • Domestic deliveries increased 20% QoQ demonstrating strong customer relationships

  • Cost transformation program achieved Rs. 5,450 crores in H1 with 94% compliance

  • India EBITDA margin improved 80 bps to 25% despite pricing pressure

  • Tata Tiscon volumes grew 27% QoQ despite seasonal rains impact

  • Netherlands JLoI signed for integrated health and decarbonisation project

  • BlueScope acquisition announced to consolidate color coated business

Concerns

  • UK market deterioration and policy uncertainty

Key financials

4 periods

Headline

  • Net Debt
    ₹87,040 Cr

Q2 FY2026

  • Consolidated Revenue
    ₹58,689 Cr
  • India Standalone Revenue
    ₹34,680 Cr
  • India Standalone EBITDA
    ₹8,394 Cr
  • NINL EBITDA
    ₹260 Cr
    YoY +17%

H1 FY2026

  • Consolidated Revenue
    ₹1.12L Cr
  • Consolidated EBITDA
    ₹16,585 Cr
  • Operating Cash Flow
    ₹10,000 Cr
  • Capital Expenditure
    ₹7,000 Cr

FY2025

  • Dividend Payment
    ₹4,490 Cr

What they filed

Q1 FY27: revenue up 21.9%, net profit up 45.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue6,255 6,733 7,046 7,267 7,491 +20%7,898 +17%8,417 +19%8,856 +22%
Net profit968 1,088 1,260 1,138 1,160 +20%1,290 +19%1,645 +31%1,656 +46%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • ₹34,680 Cr Revenue

Guidance & targets

Steel Prices

  • India price decline Q3 vs Q2 Steel Prices · Q3 FY2026 · High confidence Rs. 1,500/t lower
    our 3Q guidance for India will be about Rs 1,500 per ton lower than 2Q

    — T.V. Narendran

  • Netherlands price decline Q3 vs Q2 Steel Prices · Q3 FY2026 · Medium confidence €30/t lower
    3Q guidance just now is about €30 per ton lower in 3Q compared to 2Q but we expect 4Q to be much better

    — T.V. Narendran

Raw Material Costs

  • India coking coal cost increase Raw Material Costs · Q3 FY2026 · High confidence $6/t higher
    India consumption cost will be about $6 per ton higher in 3Q than it was in 2Q

    — T.V. Narendran

Volume Growth

  • India volume increase Q3 vs Q2 Volume Growth · Q3 FY2026 · High confidence Half a million tons more
    India will have half a million tons more volume in 3Q than in 2Q

    — T.V. Narendran

Financial Leverage

  • Net Debt to EBITDA target Financial Leverage · Medium term · High confidence 2.75 to 3x
    between 2.75 and 3 is where we would like to maintain ourselves on a more sustained basis

    — Koushik Chatterjee

Risks & concerns

  • UK market deterioration and policy uncertainty

    high

    UK EBITDA losses widened from -£41 million in Q1 to -£66 million in Q2 due to import quotas being higher than total consumption, making market vulnerable to cheap imports

    Actively engaging government for support

  • Chinese steel export pressure on global markets

    medium

    Chinese steel exports expected to cross 100 million tons again in 2025, continuing to impact pricing across global markets

    Mitigating through cost transformation

  • Netherlands decarbonisation project political uncertainty

    medium

    Recent political changes in Netherlands could affect tailor-made agreement negotiations, though management believes commitment will be honored

    Confident in bipartisan support

  • India domestic pricing pressure despite strong demand

    medium

    Domestic steel prices cheaper than import landed cost despite safeguard duty, suggesting supply-demand imbalance from capacity additions

    Focusing on volume growth and cost optimization

Q&A highlights

4 direct
European steel market dynamics and protectionist measures Direct
what Europe is doing is to make sure that the quotas for steel imports are brought down by 50% and have an import duty of 50% on any volumes exceeding the quotas... we certainly see an improvement in Netherlands, particularly from 4Q

Provides clear view on European market recovery and regulatory support impact

Asked by Vibhav Zutshi (JP Morgan)

UK EBITDA breakeven timeline and government support Direct
If there are no actions from the government, it will be difficult to get EBITDA breakeven by 4QFY26. But if there is some action similar to what is being done in Europe, then of course we can move closer to that

Clarifies dependency on government policy for UK turnaround

Asked by Vibhav Zutshi (JP Morgan)

Neelachal expansion timeline and approvals Direct
we go to the Board after we've got all the approvals in place... the FID will be taken once we have the environment approvals, which we expect in the next few months

Shows disciplined approach to expansion and realistic timeline expectations

Asked by Vibhav Zutshi (JP Morgan)

India safeguard duty status and market dynamics Direct
The notification I think has expired in November and we are waiting for advice from the government on safeguard... demand is quite strong and India is the only major country which is showing double-digit growth in steel consumption

Addresses key policy uncertainty while highlighting strong demand fundamentals

Asked by Sumangal Nevatia (Kotak Securities)

Netherlands decarbonisation project details and financing Partial
Engineering will be known on capex somewhere around, say, May or June... there is no material spend in the immediate period and we will talk in more details on the project cost, financing structure and the project phasing closer to the binding agreement next year

Provides timeline for key investment decision while acknowledging complexity

Asked by Ritesh Shah (Investec)

1 min read 4 chapters

Detailed narrative

Strong India Operations Drive Performance

India operations delivered exceptional performance with crude steel production rising 8% QoQ and 7% YoY to 5.65 million tons, primarily driven by Kalinganagar ramp-up and completion of G blast furnace relining. Domestic deliveries increased 20% QoQ, demonstrating the strength of customer relationships and sales network. Despite average HRC prices declining Rs. 2,300/t QoQ, management limited net realisation drop to Rs. 1,700/t and improved EBITDA margin by 80 bps to 25% through volume growth and cost transformation.

Impressive Cost Transformation Momentum

The global cost transformation program achieved Rs. 5,450 crores in H1 FY2026 with 94% compliance to plan. India delivered Rs. 1,036 crores in Q2 through leaner coal mix, optimized stores and maintenance expenses, and improved operating KPIs. Netherlands contributed Rs. 1,059 crores through supply chain optimization and procurement improvements. UK focused on reducing fixed costs in hire/leasing and operating charges. The program remains on track despite delays in Netherlands employee restructuring.

Strategic Downstream Consolidation and Growth

Management announced the acquisition of BlueScope's remaining 50% stake in the color coated joint venture, enabling better utilization of acquired Bhushan assets and removing JV restrictions. Tata Tiscon grew 27% QoQ despite seasonal rains, while Industrial Products & Projects deliveries increased 22% QoQ. The company continues expanding downstream capabilities with precision tube mill investments and preparation for Ludhiana EAF commissioning.

European Operations Facing Mixed Dynamics

UK operations struggled with widening EBITDA losses from -£41 million to -£66 million as import quotas remain higher than domestic consumption. Management achieved £90 million fixed cost reduction vs prior year but requires government policy support for recovery. Netherlands signed Joint Letter of Intent for decarbonisation project with up to €2 billion government support for phase one, though final investment decision awaits engineering completion and new government negotiations.

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