Tata Steel Shares Decline 3% Following Smaller-Than-Expected Q4 Net Profit

Tata Steel Shares Fall as Company Reports Below-Estimate Profit

Tata Steel shares declined more than 3 percent in trade on Monday after the company reported a March quarter profit that came in below analysts' estimates. The stock fell as much as 5.44 percent to an intraday low of Rs 205.05 per share on the NSE. It had opened nearly 2.7 percent lower and has fallen 6 percent over the last two sessions.

India's second-largest steelmaker by market capitalisation, Tata Steel, reported a consolidated net profit of Rs 2,926 crore for the quarter ended March 31, more than double from a year ago. However, the figure was below analysts' average estimate of Rs 3,080 crore, according to data compiled by LSEG.

The company's earnings were impacted by higher raw material costs and a one-time charge related to restructuring at its Netherlands operations. Prices of coking coal, a key raw material for steelmakers, rose for the second consecutive quarter amid continuing gas shortages linked to the US-Israeli war against Iran, resulting in higher coal consumption.

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Tata Steel's cost of materials consumed rose 16.7 percent during the quarter, while total expenses increased 8 percent to Rs 58,502 crore. The company also reported a net one-time charge of Rs 340 crore in the quarter, which included a charge of Rs 595 crore related to restructuring and redundancy provisions at its Netherlands unit.

Analysts said domestic steel prices recovered during the January-March quarter after declining sequentially for two quarters. The recovery was supported by safeguard duties and improved demand conditions. Axis Securities downgraded the stock to "Hold" from "Buy", citing uncertainty surrounding the Netherlands business as an overhang.

JM Financial, however, said the Netherlands business is expected to maintain positive EBITDA even in the event of a coke oven closure, with lower carbon costs likely to partly offset higher procurement expenses. The brokerage also noted that Tata Steel achieved cost savings of Rs 10,800 crore in FY26, representing 95 percent of its target, and has set a savings target of Rs 7,100 crore for FY27.

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