Tata Steel Q3 preview: Analysts estimate losses; revenue may fall up to 7%

Tata Steel Q3 preview: Steel giant Tata Steel will report its December quarter (Q3FY25) results today. The company's Q3FY25 performance is expected to show mixed results, as brokerages forecast a challenging quarter due to weak demand, lower steel prices, and ongoing pressures in international markets. 

 

Analysts at Antique Stock Broking predict a 7.6 per cent Y-o-Y growth in Tata Steel's standalone volume, driven by the Kalinganagar expansion, but consolidated Ebitda is likely to decline 28 per cent Y-o-Y, reflecting lower profitability in Indian operations and continued losses in Europe. 

 

Similarly, Anand Rathi projects a 5.3 per cent Y-o-Y revenue decline, citing weaker domestic steel prices and ongoing challenges in European markets. 

 

Overall, while Tata Steel’s performance remains under pressure, reduced losses in Europe and falling coking coal prices may offer some support. Analysts expect a net loss ranging from Rs 583 crore to Rs 959 crore for the quarter.

 

On the bourses, Tata Steel shares closed 0.38 per cent lower at Rs 130. In comparison, BSE Sensex settled 0.43 per cent lower at 76,190.46 levels, on Friday, January 24, 2025. 

 

Given this, here’s what brokerages are expecting in Q3 results from Tata Steel:

 

Antique Stock Broking

 

According to analysts at Antique Stock Broking, Tata Steel's standalone volume is expected to grow 7.6 per cent Y-o-Y to about 5.3 MT, aided by the Kalinganagar 5mpta expansion. 

 

While European steel volumes are expected to improve 7 per cent Y-o-Y to 2.1 MT, the region is projected to report an Ebitda loss of Rs 1,010 core, an improvement from Rs 2,870 crore in Q3FY24. Consolidated Ebitda is forecast to decline 28 per cent Y-o-Y to Rs 4,490 crore, driven by lower Indian operations' Ebitda and forex losses, partially offset by reduced losses in Europe, leading to a net loss at the adjusted PAT level.

 

Analysts estimate revenue of Rs 51,761.7 crore, a decline of 6.4 per cent Y-o-Y; and a net loss of Rs 693.9 crore.

 

Anand Rathi

 

Analysts noted that domestic steel prices have been under pressure, with a 6 per cent Q-o-Q drop in HRC prices to Rs 47,765/tonne due to weak demand and higher imports. However, long-steel prices saw a 4 per cent Q-o-Q increase, supported by higher project segment demand. Tata Steel’s European operations are likely to remain a drag, with expected losses in the Netherlands despite improved UK results, they added.

 

Analysts forecast revenue of Rs 52,387.2 crore, a 5.3 per cent Y-o-Y decline; a net loss of Rs 583.7 crore; and an Ebitda margin of 8.7 per cent.

 

Elara Capital

 

Elara Capital maintains a cautious outlook on the domestic steel sector, citing weaker-than-expected demand recovery post-festival season, subdued steel prices, and limited export opportunities. 

 

It added that the impact of US-China trade dynamics, particularly under President Trump's policies, may further pressure domestic demand and increase export competition. However, lower coking coal prices and potential safeguard duties on steel imports could provide some support.

 

Thus, revenue is expected to come in at Rs 51,648.8 crore, down 6.6 per cent Y-o-Y; Ebitda at Rs 4,532.2 crore, down 27.6 per cent Y-o-Y; and a net loss of Rs 959.1 crore.