Why Tata Steel's Kalinganagar expansion makes good sense

Growing the more profitable integrated India capacities, after restructuring European operations, will boost its consolidated earnings

Tata Steel’s announcement on capacity enhancements at its Kalinganagar plant shows its renewed domestic focus after streamlining the European operations. The company plans to expand its Kalinganagar (Odisha) steel-making capacities from the current three million tonnes per annum (MTPA) to eight MTPA in four years. 

The move is seen as a positive one, given that Tata Steel enjoys one of the highest profit margins among domestic and global steelmakers. So the expansion of its India capacities through organic route should translate into a substantial increase in its profits too. Moreover, the uptrend in domestic steel cycle should lend support.

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