Jefferies has retained its buy rating on Tata Steel with a target price of Rs 160, following mixed Q3 FY25 results. The company’s reported EBITDA (excluding the write-back of certain provisions) fell 28% YoY, driven primarily by foreign exchange losses, but was in line with the brokerage’s estimates. EBITDA per tonne for the standalone business dropped 5% sequentially to Rs 11,500, while the Netherlands business reported a near-zero EBITDA per tonne. However, EBITDA losses in the UK contracted sequentially to -$153 per tonne.
Despite these challenges, Tata Steel saw a 3% sequential reduction in net debt, signaling improved financial discipline. Jefferies highlighted the near-term challenges in European operations but remains optimistic about the long-term recovery.
The consolidated revenue from operations stood at ₹53,231.28 crore, reflecting a decline from ₹54,727.30 crore in the corresponding quarter last year. This marks a year-on-year (YoY) dip of approximately 2.73%.
On the profitability front, Tata reported a consolidated net profit of ₹295.49 crore for Q3 FY2024, a sharp decline compared to ₹522.14 crore in Q3 FY2023. This represents a YoY drop of 43.41%. The decline in net profit is attributed to several factors, including higher costs and subdued demand in key segments.
