Tata Steel — Q3 FY26 earnings call

Call held 6 Feb 2026

Management summary

Tata Steel delivered a resilient Q3 FY26 amid weak global steel prices, with India crossing 6 MT quarterly deliveries for the first time. The cost transformation program offset lower realisations across geographies. India remains the profit anchor at 24% EBITDA margin. Europe outlook is improving with CBAM and expected safeguard revisions from June 2026, while UK continues to bleed awaiting policy support. Management guided Q4 EBITDA expansion across all geographies with India prices up Rs 2,300/t QoQ and volumes up ~0.5 MT.

Highlights

  • Consolidated EBITDA margin improved 300 bps YoY to 15% for 9M FY26

  • India crude steel production up 12% QoQ and YoY to 6.34 MT; quarterly deliveries crossed 6 MT for the first time

  • Cost transformation program delivered Rs 8,600 crores savings in 9M across geographies (93% compliance to plan)

  • Net debt reduced by Rs 5,200 crores QoQ to Rs 81,834 crores; Net debt/EBITDA at 2.6x

  • Free cash flow of Rs 7,054 crores in Q3, significantly higher than Q2

  • UK EBITDA losses halved YoY but remain at ~£63M/quarter; awaiting government safeguard measures

  • Netherlands EBITDA nearly tripled YoY to €210M for 9M; CBAM definitive phase started Jan 2026

  • India EBITDA margin at 23% for Q3; 24% for 9M FY26

Key financials

3 periods

Headline

  • Net Debt
    ₹81,834 Cr
  • Net Debt/EBITDA
    2.6×

Q3

  • Consolidated Revenue
    ₹57,002 Cr
  • Consolidated EBITDA
    ₹8,309 Cr
  • Consolidated EBITDA Margin
    15%
  • India Standalone Revenue
    ₹35,578 Cr
  • India Standalone EBITDA
    ₹7,940 Cr
  • India EBITDA Margin
    23%
  • India Crude Steel Production
    6.34 MT
    YoY +12%
  • India Deliveries
    6 MT
  • NINL EBITDA
    ₹350 Cr
  • UK EBITDA Loss
    -63 million £
  • Netherlands EBITDA
    55 million €
  • Operating Cash Flow
    ₹10,300 Cr
  • Free Cash Flow
    ₹7,054 Cr
  • Capex
    ₹3,290 Cr
  • Cost Transformation Savings
    ₹3,000 Cr

9M

  • Consolidated EBITDA
    ₹24,894 Cr
    YoY +31%
  • Consolidated EBITDA Margin
    15%
  • India EBITDA
    ₹24,431 Cr
    YoY +12%
  • Netherlands EBITDA
    210 million €
  • Free Cash Flow
    ₹5,640 Cr
  • Cost Transformation Savings
    ₹8,600 Cr

What they filed

Q1 FY27: revenue up 19.0%, net profit up 28.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue32,399 32,760 34,399 31,014 34,680 +7%35,578 +9%38,448 +12%36,897 +19%
EBITDA6,610 7,500 6,979 7,119 8,148 +23%7,731 +3%9,473 +36%9,183 +29%
Net profit3,591 3,879 3,169 3,523 4,060 +13%3,822 −1%4,660 +47%4,536 +29%
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

  • ₹35,578 Cr Revenue

Guidance & targets

Other

  • India Q4 Price Increase (QoQ) —
  • India Q4 Coking Coal Cost Impact —
  • UK Q4 Realisation —
  • Netherlands Q4 Realisation —
  • Netherlands Q4 Volumes —
  • Consolidated Q4 Volume Growth —
  • Q4 EBITDA Outlook —
  • Net Debt/EBITDA Target —
  • EU Price Opportunity —
  • UK Breakeven Spread Requirement —

Risks & concerns

  • UK Operations Bleeding

    high

    UK losing ~£63M/quarter EBITDA; dependent on government safeguard measures which haven't materialized yet

  • Chinese Steel Exports

    high

    Chinese finished steel exports crossed 110 MT for second consecutive year, significantly impacting global trade

  • US Tariff Impact on Netherlands

    medium

    50% US tariffs hit high-margin packaging/auto business; forcing mix dilution as volumes redirect to lower-margin EU segments

  • Coking Coal Cost Inflation

    medium

    Q4 coking coal consumption costs up $15/t QoQ ($22/t on purchase); will partly offset steel price recovery

  • Netherlands Emission Costs

    medium

    €150M emission rights costs in 9M; free allowances declining annually through 2032-34

  • Netherlands Class Action Lawsuit

    medium

    Environmental class action filed Dec 2025 by litigation-funded foundation; in initial defense phase

  • India Mine Lease Expiry 2030

    medium

    Jamshedpur legacy costs and mine lease expiry in 2030 could increase cost structure

  • EAF UK Grid Connection

    medium

    3 MTPA EAF project commissioning critically dependent on National Grid high-power electricity connection

Q&A highlights

7 direct
European Price Sustainability Direct
We expect that prices in Europe will move away from Asian prices and move towards the US steel prices. It may not reach the levels of US steel prices but certainly will move closer to that.

Signals structural repricing of European steel driven by CBAM and halving of import quotas from 30MT to 15MT

Asked by Vibhav Zutshi, JP Morgan

India Expansion Sequencing Direct
NINL first (FID in couple of months, 35-40 months execution), then Meramandali, then Maharashtra or Kalinganagar expansion

Clarifies capex pipeline and timeline; NINL commissioning ~FY2029

Asked by Vibhav Zutshi, JP Morgan

UK Losses and Policy Support Direct
We are hoping that some actions will be taken in the next few weeks by the UK government... it will not become positive till there is some action from the UK government on imports

UK remains a drag; management candid that EBITDA won't turn positive without government intervention

Asked by Pinakin Parekh, HSBC

Q4 India Price and Volume Guidance Direct
India prices on QoQ will be about Rs 2,300/t higher... overall we expect EBITDA to be better in 4Q compared to 3Q, and volumes to be almost half a million tons better

Clear quantitative guidance for Q4 across all geographies pointing to sequential improvement

Asked by Vikash Singh, ICICI Securities

CBAM Impact on India Exports Direct
Tata Steel doesn't sell much to Europe... I don't think that volume will be so significant as to make an impact in the domestic market in India

Dismisses concern that CBAM-redirected Indian exports would pressure domestic prices

Asked by Pallav Agarwal, Antique

Mining Cost and 2030 Mine Expiry Partial
We are not going to exit captive mining... cost of ex-mines iron ore for us is possibly one of the lowest. Transition planning for 2030 has already started.

Addresses key risk of mine lease expiry in 2030; management confident on continued captive mining advantage

Asked by Prateek Singh, IIFL Capital

Netherlands CBAM Pricing Pass-through Direct
The price increases on account of CBAM and tariff are pass throughs. There wouldn't be any impact on additional cost.

Confirms CBAM/tariff-driven EU price increases flow directly to bottom line without offsetting costs

Asked by Rajesh Majumdar, 360 ONE Capital

European Supply Restructuring Direct
I don't think anyone is going to reline a blast furnace in Europe now... over the next 5-10 years, there will be a fair amount of restructuring on the supply side

Bullish structural thesis for Europe: supply contraction + CBAM + quotas = sustained better pricing

Asked by Siddharth Gadekar, Equirus Securities

2 min read 4 chapters

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.

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