Tata Steel Q3 Performance Surpasses Expectations Amid Slowdown

Tata Steel's shares are expected to be in focus on January 28 after the company delivered stronger-than-anticipated earnings for the quarter ending December 31, 2024.

Despite reporting a consolidated profit of ₹295 crore for the October-December quarter—a 43% decline compared to the same period last year—the company surpassed analysts' expectations.

As of 3:30 PM IST, Tata Steel's share price was at ₹128.95 or 2.04% higher than its previous close.

The company's revenue stood at ₹53,648 crore, reflecting a 3% year-on-year decline due to stable or declining steel prices during the quarter. Although Tata Steel recorded higher volumes, the broader steel industry faced pressure from low-cost imports from China, Vietnam, and South Korea, which impacted realisations across its key markets—India, the UK, and the Netherlands.

International brokerage JPMorgan reaffirmed its 'overweight' rating on Tata Steel, setting a price target of ₹155 per share. The brokerage highlighted a positive earnings surprise due to lower-than-expected other expenses and a reduction in net debt, which it viewed as a key positive.

The earnings beat was driven by strong performances in India and the US, where average selling prices exceeded expectations. JPMorgan also emphasized the importance of monitoring raw material costs and the profitability of the European business.

Meanwhile, Morgan Stanley maintained an 'equal-weight' rating, with a price target of ₹160 per share. The brokerage noted that while Tata Steel's domestic performance was strong, its UK business met expectations, and other international operations performed well.

Earlier in January, Tata Steel's provisional production and sales figures indicated that its India operations delivered 5.29 million tonnes in Q3, marking an 8% year-on-year increase and a 4% rise from the previous quarter. The company attributed this growth to stable domestic demand and a strategic presence in export markets. Sales volumes also grew in the Netherlands, with demand support from UK downstream operations.