Tata Steel, JSW Steel Q3 hurt by price erosion. Rebound on the horizon?

livemint.com:

Subscribe to enjoy similar stories. Indian steel majors Tata Steel Ltd and JSW Steel Ltd experienced strong domestic demand in the December quarter (Q3FY25), which helped offset a 12-13% drop in realization for both companies. Tata Steel’s standalone Ebitda declined 8% year-on-year, but was 24% higher than analysts’ estimates, supported by lower other expenses and 8% growth in volumes.

Ebitda is earnings before interest, tax, depreciation and amortization; it is a key measure of profitability for companies. Ebitda per tonne was still down 16% to ₹14,200 due to lower realization and firm raw material prices. The company’s European operations, accounting for 38% of consolidated revenue in the first nine months of FY25, recorded lower losses of ₹740 crore in Q3 vis-à-vis ₹2,900 crore last year.

Fixed cost for the UK operations declined by about €80 per tonne (about ₹8,600) after manpower was reduced following the closure of the blast furnace. Losses for Netherlands business also decreased, aided by lower energy costs. Also Read: Bruised by rising imports, steelmakers pin New Year hopes on safeguard duty JSW Steel recorded a similar performance, beating analysts’ estimates despite a 22% decline in its consolidated Ebitda, supported by 12% growth in volumes.

The decline in Ebitda per tonne was sharper at 30% to ₹8,300. The management has projected coking coal prices to come down by ₹800-1,200 per tonne in Q4 along with marginally lower iron ore prices, which should help improve its profitability. Tata Steel has largely completed its expansion with 5 mtpa (million tonnes per annum) Kalinganagar facility commissioned in September and limited capex planned for FY26.