Detailed Narrative
India: Record Volumes and Downstream Ramp-up
India delivered record quarterly deliveries exceeding 6 MT for the first time, with crude steel production at 6.34 MT (+12% YoY/QoQ). Despite Rs 2,100/t price drop QoQ (worse than guided Rs 1,500/t), EBITDA margin held at 23% through cost optimization (Rs 890 crores Q3 savings). Auto & Special Products achieved best-ever quarterly volumes with advanced grades from Kalinganagar. Downstream mix improving: auto downstream >50% of 9M sales, Tata Tiscon best-ever Q3, Steelium +20% QoQ. Omni-channel GMV at Rs 2,380 crores (+68% YoY). NINL delivered Rs 350 crores EBITDA (+35% QoQ, 22% margin). Key strategic moves: consolidated color-coated JV and acquired 50.01% of Thriveni Pellets.
Europe: CBAM and Safeguards to Structurally Reprices Market
Netherlands Q3 EBITDA at €55M (€39/t), impacted by US tariffs (~€50M adverse in 9M) and emission costs (~€150M in 9M). Excluding these, underlying EBITDA exceeds €400M or €93/t for 9M. CBAM definitive phase started Jan 2026 with 10% markup in 2026, 20% in 2027. EU safeguard revisions expected June 2026 to halve import quotas from 30MT to 15MT and raise duties from 25% to 50%. Management sees opportunity for ~€100/t price increase over full year. Contracts are ~35% of volumes (packaging + auto). UK remains challenged at -£63M EBITDA/quarter despite £400-500M fixed cost reduction over 2 years. UK safeguard revision expected 'in weeks'. EAF project progressing - demolition complete, awaiting National Grid connection.
Cost Transformation and Capital Allocation
Cost transformation delivered Rs 3,000+ crores in Q3 alone (India Rs 890 cr, UK Rs 570 cr, Netherlands Rs 1,600 cr). 93% compliance to internal plan; deviation mainly from Netherlands employee restructuring (Rs 737 cr provision booked). India savings from purchase optimization, reduced refractories, coastal waterways, power wheeling, leaner coal mix. UK outperformed plan via maintenance discipline, insourcing, energy efficiency. Netherlands via coal blend optimization and value-in-use. Capex of Rs 3,290 cr in Q3 focused on India. Net debt/EBITDA at 2.6x vs 3x ceiling. Growth capex sequenced: NINL first (FID in months), then Meramandali, then Maharashtra/Kalinganagar. Ludhiana plant starting ~March 2026.
Q4 FY26 Outlook
Management guided clear sequential improvement: India blended price +Rs 2,300/t (HRC spot +Rs 3,500/t) offset partly by coking coal +$15/t consumption cost. Netherlands realisations down €30-33/t on mix (not price - packaging contracts renegotiation and US diversion) but offset by cost savings; volumes +400k tons. UK realisations +£5/t. Overall Q4 EBITDA expected higher than Q3 across all geographies with volumes ~500k tons higher. No major blast furnace relines in FY27 will support volumes. Auto contract renewals in April to reflect spot market recovery.