Tata Steel reports loss in Q2 on impairment charge, provisions, weak UK performance

Tata Steel's Q2 consolidated total revenue from operations came in at Rs 55,681 crore, as against Rs 59,877 crore reported in the year-ago period

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26 Aug, 2025 12:21

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Tata Steel reported a consolidated net loss of Rs 6,511 crore in the second quarter of 2023-24 as against a net profit of Rs 1,297 crore a year ago, as the company was hit by a double whammy of impairment charges and shrinking margins in Europe.

Late evening on November 1, the Tata group steelmaker reported a consolidated total revenue from operations of Rs 55,681 crore, as against Rs 59,877 crore reported in the year-ago period. While the street had expected that the company would report a consolidated loss, it had pegged it at much lower levels at Rs 700 crore, according to five analysts polled by Moneycontrol.

“India business generated a higher margin of around 20% and EBITDA stood at Rs 6,841 crore. In Europe, margins moderated especially in UK business while Netherlands business was broadly stable on a quarter-on-quarter (QoQ basis). Revenue per ton was lower in both geographies. However, improved costs in the Netherlands led to broadly similar margins,” Koushik Chatterjee, Executive Director and Chief Financial Officer, said in a statement.

Ahead of the results, shares of Tata Steel closed at Rs 116.60 on November 1 on BSE, down 1.8 percent from the previous close.

Provisions weigh on bottomline

The company said that it has assessed the potential impact of the Electric Arc Furnace route (EAF) based decarbonisation project and restructuring in Tata Steel UK (TSUK). Subsequently, it has undertaken an impairment charge of Rs 12,560 crore in standalone financial statements and Rs 2,746 crore in consolidated financial statements. Tata Steel continued to flag going concern for its European business citing inadequate cash flow and liquidity.

Tata Steel has also taken a charge towards restructuring and other provisions of Rs 3,612 crore in consolidated financial statements.

“Given our plans to change the processed route for steelmaking, the existing heavy-end assets at TSUK will only be used for a defined period. Accordingly, we have taken an impairment charge of Rs 12,560 crore in the standalone financial statements. We have also taken a charge of Rs 6,358 crore in consolidated financial statements in relation to the UK business. We continue to remain focused on cost optimisation, operational improvements and working capital management to maximise cashflows,” Chatterjee said.

In September, the UK government agreed to give a grant of £500 million to help Tata Steel decarbonise its Port Talbot project at Wales, after months of negotiations to save the project, the company said in a statement. Tata Steel will have to invest the balance in the total capital cost of £1.25 billion.

Europe Operations

Tata Steel Europe (TSE) recorded revenues of Rs 18,846.7 crore in the quarter as against Rs 21,558.8 crore a year ago.

Analysts had said ahead of the results that the company witnessed a weak performance in Europe due to lower shipments and decreased realisations.

"TSUK continues to implement various measures aimed at improving its business performance and conserving cash including but not limited to ensuring adequate liquidity, if required, through available financing options, management of working capital and implementation of cost reduction measures," the company said.

Standalone performance

Total revenue from operations was Rs 33,223.2 crore In Q2FY24, down from Rs 34,642.8 crore a year earlier.

On a standalone basis, the company swung to a net loss of Rs 8,530.6 crore as against a profit of Rs 2,214.5 crore in the same period last year. Impairment charges dented the bottomline despite total expenses declining 10 percent year-on-year to Rs 29,022 crore.

Crude steel production in Q2FY24 was around 5 million tons and was broadly similar on a QoQ basis but up 5 percent on a YoY basis. Deliveries stood at 4.82 million tons, marginally higher from the previous quarter.

TV Narendran, Chief Executive Officer & Managing Director, said in a statement, “Tata Steel India delivered steady performance, with crude steel production of around 5 million tons. Domestic deliveries were up 6 percent YoY, despite renewed volatility and seasonal factors during the quarter. Among the key segments, Auto and Branded Products & Retail had best ever 2Q sales.”