Global rating agency Moody’s on Wednesday maintained a stable outlook for Tata Steel. Income expected to improve in next 2 financial years Moody’s Ratings on Wednesday said it has maintained a stable outlook on Tata Steel, expecting the domestic steel major to improve its earnings over the next two financial years. According to PTI news, Moody’s said in a report that it expects Tata Steel’s consolidated EBITDA to be around Rs 290 billion in the financial year ending March 2025 and Rs 380 billion in financial year 2026, up from Rs 241 billion in 2023-24.
Stable outlook reflects expectation from the company
According to the news, Hui Ting Sim, assistant vice president and analyst at Moody’s Ratings, said that the affirmation of the rating and stable outlook reflect our expectation that the structural improvement in Tata Steel’s earnings over the next two years will mitigate risks associated with new state taxes on mining activities in India and growth in its operations in Europe. Its forecast assumes that Tata Steel’s India operations will generate EBITDA of Rs 14,700-15,300 per tonne before state mining taxes in FY2025 and FY2026, which is in line with the company’s eight-year average earnings.
Tata Steel’s steel delivery expected to increase
Rating agency Moody’s expects Tata Steel’s steel deliveries in India to gradually increase from 20 million tonnes in the previous fiscal to about 23 million tonnes by FY2026 due to the addition of five million tonnes per annum (MTPA) production capacity at Kalinga Nagar in Odisha. Also, Tata Steel’s operations in Europe will grow over the next two years, increasing EBITDA (earnings before interest, tax, depreciation and amortization) from slightly negative in FY25 to around Rs 30 billion in FY26.
Profitability at the Netherlands plant will recover after losses caused by operational disruptions due to the relining of its blast furnace in FY24. Losses at its UK operations will also narrow after the closure of the loss-making blast furnace. Tata Steel is one of the top three steelmakers in India with offshore operations.
Tata Steel share price
Tata Steel share price closed at Rs 153.70 on Wednesday, down 0.65 per cent from the previous trading session. The stock has given a return of just 0.42 per cent in the last one week, while it has given a return of 31.32 per cent in one year.
