CARE

TATA Steel is planning to re-look at its new material business and exit some of them which are not scalable in the long run. The company was bullish on the new material business until recently and wanted to develop it as a hedge for cyclical steel business. Tata Steel has set a target to generate 10 per cent of the revenue from new materials by 2025 and enhanced its research and development strength with over 200 researchers besides collaborating with 40 institutes. The company has established Tata Steel Advanced Materials Research Centres at Chennai in collaboration with the Indian Institute of Technology, Madras and another at Bengaluru, in collaboration with the Centre for Nano and Soft Matter Sciences. The objective of these Centres is to work closely with academia and other centres of expertise to strengthen the portfolio of advanced material research and its applications.

Tata Steel to review new material businesses

The company expects to be largely immune in its Indian operations from US President Donald Trump's imposition of a 25 percent tariff, plus an unspecified penalty on Indian exports to the US. Narendran observed that Tata Steel exports no steel from its Indian operations to the US, and any secondary impact, from other Indian manufacturers across sectors using steel made by the company, is expected to be limited. For its European operations, however, the company may see some impact, despite both the UK and the European Union agreeing trade deals with the US that lowered the tariffs on most exports. Tata Steel's management said that it is seeking exemptions in order to route most of its sales to the US through the UK, which has a lower tariff burden compared to the European Union. The UK-US bilateral trade deal implies that nearly all UK exports will be tariffed by the US at 10 percent, including steel, with a condition that the steel must be fully produced in UK facilities. Tata Steel currently does not produce crude steel in the UK, due to its Port Talbot blast furnaces being shut for a GBP 1.25 billion green transformation project. Tata Steel's Netherlands facilities produce crude steel, but the US still charges a 50 percent tariff on steel produced in the EU.

Tata Steel is largely expected to be immune from US tariff threats to its Indian operations

The Competition Commission of India has approved Tata Steel Limited’s proposed acquisition of sole control in Tata BlueScope Steel Pvt. Ltd. by purchasing the remaining 50% equity shareholding currently held by BlueScope Steel Asia Holdings Pty Ltd.

CCI Approves Tata Steel Limited’s Proposed Acquisition of Tata BlueScope Steel

The steel industry is highly sensitive to economic cycles, interest rates, and seasonal shifts. Supply responsiveness is limited by high capital intensity and frequent project delays, while producers' status as price-takers leaves their cash flows and profitability vulnerable to market volatility.



Tata Steel has guided for a ₹15,000 crore FY26 capex, primarily to boost domestic capacity. Major projects include completing the 8 MTPA Kalinganagar expansion by H1FY26 and a 0.8 MTPA scrap-based plant in Ludhiana by March 2026. With long-term goals of 35–40 MTPA, the company is also planning a major expansion at NINL (up to 9.5 MTPA). 



Global steel input prices—volatile due to geopolitics, Chinese policy, and supply-demand shifts—are managed by adjusting steel pricing to reflect raw material costs. The company mitigates risk through long-term contracts, derivative hedging, and rigorous vendor assessments to ensure supply reliability.


Foreign currency risk is mitigated by using local currency for cash flows and debt, alongside a natural hedge from global operations and the dollar-linked pricing of international steel.



The issuer has made timely interest payments.

Natrajan Chandrasekaran, Chairman

As the Tata Group's flagship steel company, TSL benefits from a 31.76% Tata Sons (TSPL) stake, shared branding, and Chairman N. Chandrasekaran’s leadership. TSPL’s strategic support is proven by past financial interventions, including a ₹12,800 crore infusion in FY18, ensuring TSL's credit stability

FY25 sales rose to 30.96 MT with PBILDT increasing to ₹25,298 crore, driven by Netherlands volume growth and narrowing UK losses. While realizations dipped in FY25, they rebounded to ₹74,688/tonne in Q1FY26 due to a 12% safeguard duty. TSL also hit ₹6,600 crore in cost savings, targeting ₹11,500 crore for FY26.


FY25 debt metrics improved marginally, with Net debt/PBILDT at 3.35x and TD/GCA at 6.16x. Improvement is expected from H2FY26 as the 5 MTPA expansion hits full capacity and UK operations break even. Management targets a 2.75–3x leverage ratio, prioritizing deleveraging and sustainable growth over debt-funded expansion.



Tata Steel is transitioning to green steel with two major projects: a 3.2 MTPA Electric-Arc-Furnace in the UK (£500M grant, FY2028 completion) and a 3.5 MTPA DRP-EAF facility in the Netherlands (Phase 1 by 2030). These shifts focus on scrap-based production and government-supported decarbonization.


TSL is iron ore self-sufficient domestically, using a centralized entity for bulk group procurement. Though legacy mine leases expire in 2030, the company is securing future supply by bidding for new reserves and planning to re-acquire current mines through open auctions.


TSL is a vertically integrated producer with 26.6 MTPA Indian capacity and global operations (UK, Netherlands, Thailand). Its 85% flat/15% long product mix serves diverse industries. Controlling the full value chain—from mining to a 9-port logistics network—ensures operational control and geographic diversification.



Rating agency	Rating	Needle position
CARE	AA + /Stable	near High Safety
IND	AA + (Positive)	between Medium and High Safety

Security Name: 9.8359% Tata Steel Limited 01 Mar 2034

ISIN: INE081A08223

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