Morgan Stanley has maintained its equal-weight rating on Tata Steel with a target price of Rs 160, highlighting a strong Q3 FY25 performance. The company reported standalone EBITDA of Rs 75 billion, 24% above the brokerage’s estimate, driven by lower costs, particularly in other operating expenses. Consolidated EBITDA stood at Rs 59 billion, 30% ahead of estimates, with better-than-expected results from the Netherlands and “others” businesses.
Consolidated net profit for the quarter was Rs 3 billion, including an exceptional loss of Rs 1.3 billion related to an employee separation scheme. Net debt moderated sequentially from Rs 888 billion to Rs 858 billion, reflecting improved financial management. While European operations remain under pressure, Morgan Stanley noted the resilience in Tata Steel’s domestic business and cost efficiency as key positives.
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 Steel 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.
