Can Tata Steel deliver a stronger Q2 despite rising costs?
In this exclusive conversation, Tata Steel CEO T.V. Narendran explains the company's Q1 performance, the reasons behind margin pressure and why he expects the second quarter to be stronger on volumes.
He discusses the impact of higher coking coal prices, supply chain disruptions, the Middle East conflict, steel price trends, and the outlook for operations in India, the Netherlands and the UK.
#TataSteel #TVNarendran #Steel #IndianStockMarket #StockMarket #Q1Results #Earnings #BusinessNews #Markets #Investing #Stocks #manufacturing...
What T. Narendran said
Written from the verified transcript and checked against it. Every figure links to the moment it was said.
T. Narendran, CEO of Tata Steel, discussed Q1 results impacted by Middle East crisis costs of 1,200 crores, with volumes and mix benefits offsetting shutdowns. He expects Q2 volumes to improve in India, Netherlands, and UK, but margins to compress due to higher coal prices and lower steel prices in India, offset by higher volumes. Net debt-to-equity is forecast at 2.3-2.5, with internal cash covering capex. Expansion focuses on Kalinganagar and downstream businesses like tin plate, wires, and tubes. The Middle East crisis cost Tata Steel 10 million pounds in UK, 20 million euros in Netherlands, and 800 crores in India, with similar impact expected in Q2 due to rising freight, insurance, gas prices, and consumables. Narendran emphasized downstream value capture and product differentiation for margin stickiness.
Key takeaways
Q2 India steel prices expected 1,500 rupees per ton lower, but volumes higher, keeping rupee crores up.
Middle East crisis cost Tata Steel 1,200 crores in Q1, with similar impact expected in Q2.
Net debt-to-equity forecast at 2.3-2.5, with internal cash covering all planned capex.
Q2 coking coal costs rise $5/ton in India and $10/ton in Netherlands; Netherlands realizations up €10/ton.
FY2026 volumes expected 2 million tons higher than previous year, aided by clean year for blast furnaces.
That's right. Thanks VSA for that. And the stock is now gaining in trade, almost 2% up in the last few minutes of trade or half an hour. This particular stock has really gained momentum after its Q1 numbers. And we'll be joined by the management very soon. In fact, taking you through one key highlight is that it's a beat on revenue, beat on EBITDA, but when we talk about the EBITDA margins, it is below the expectation. T. Narendran joins in to talk more about the numbers. Mr. Narendran, always a pleasure to get chatting with you every quarter. My first question: there were some shutdowns which really impacted the volume and your margins have been below the expectations. The key highlights for what really transpired and what all is going to be carried forward for Q2?
You know, obviously in India we are getting the benefits of the investments that we made in volumes and product mix, etc. We've of course been helped by the prices. The prices in Q1 were about 6,000 rupees higher than it was in Q4 and we had guided that. Cooking coal costs went up and we had an impact of the Middle Eastern crisis. The West Asia crisis, I think, hit us by about 1,200 crores in the quarter. So these numbers have been delivered despite that, largely because of a lot of cost takeout actions that we've done over the years. We still have work to do. I think the volumes can be better in India. We had a few shutdowns and some operational instability, so hence we expect Q2 to actually be better than Q1 in terms of volumes. The margins may get compressed a bit because coal prices are going up and steel prices have pretty much stabilized, but the rupee crores will probably be higher in Q2 compared to Q1 because the volumes will be higher. We expect Netherlands to do better in Q2 than Q1 and UK also to do better in Q2 than in Q1.
You slightly spoke about the margin picture and of course it is below what the street was expecting. Of course there are many constraints, supply constraints as well as the raw material cost. Give us a better picture on the margin sustainability in Q2.
So we expect cooking coal prices from a consumption basis to go up about $5 per ton in Q2 compared to Q1 in India and about $10 a ton in Netherlands in Q2 compared to Q1. In UK, as you know, we've shut the blast furnaces so we just send slabs from here and coils from here. As far as it is concerned for Netherlands, we expect it to be about $5 per ton lower. The margins in India will get compressed a bit because we expect the price of steel prices to be about 1,500 rupees per ton lower in Q2 compared to Q1. So we will see a margin compression but because the volumes in Q2 will be much higher than Q1, we expect the rupee crore to be higher because the volumes will make up.
Right. You spoke about the prices in India. Give us a better picture of the global price outlook and you operate in three different regions. So the price realization picture in this quarter as it is sustaining for you in this quarter.
So I just told you about India. So if you look at Europe, I think in Netherlands in Q1 our realizations were about €7 per ton higher than Q4 and next quarter will be about €10 per ton higher. So effectively you had about €80 per ton increase in realizations over two quarters. In the UK, if you look at last quarter, we were 90 pounds per ton higher than the previous quarter because in UK there were some specific trade actions with the UK government took which had an impact on prices.
Right. Also, many expansionary projects are on the anvil and many are really at the moment underway. So Mr. Narendran, what are the debt and leverage levels that you are comfortable with and what have you ended the quarter with?
8 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
Narendran, T. (2026, July 31). Tata Steel CEO Reveals The Biggest Threat To Profits [Interview transcript]. NDTV Profit. CEOInterviews.AI. https://ceointerviews.ai/interview/1146509/
MLA
T. Narendran. "Tata Steel CEO Reveals The Biggest Threat To Profits." NDTV Profit, 31 Jul. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1146509/.
BibTeX
@misc{narendran2026_1146509,
author = {T. Narendran},
title = {Tata Steel CEO Reveals The Biggest Threat To Profits},
howpublished = {Interview transcript, NDTV Profit. CEOInterviews.AI},
year = {2026},
month = {jul},
url = {https://ceointerviews.ai/interview/1146509/},
note = {Speaker-attributed transcript with timestamps}
}
