SCRIPTING A STUNNING RECOVERY

STRATEGIC EXPANSION, ROBUST INDIAN OPERATIONS FUEL RECOVERY. CAN THIS SUSTAIN AMID GLOBAL UNCERTAINTIES?

- MANOJ SHARMA

#11 TURNAROUND STORY
TATA STEEL
T.V. Narendran, MD & CEO, Tata Steel
TOTAL INCOME (FY24) ₹2,26,665 cr

TATA STEEL broke a seven-year profitability streak in FY24. Its consolidated loss touched ₹4,437 crore, higher than even FY15 (₹3,926 crore) and FY16 (₹3,049 crore) as geopolitical concerns and moderating demand from China put pressure on prices and environment and regulatory costs dented profitability. Total income fell 8.74% to ₹2.26 lakh crore due to lower sales, elevated raw material costs, sharp fall in volumes at Tata Steel Nederland (TSN) B.V. and high operating costs in the U.K. These hurt business in all three key locations: India, the U.K. and the Netherlands. Also, higher Chinese exports amid an economic slowdown there softened prices globally, affecting profitability.

While these factors hurt the industry as a whole, some challenges were unique to Tata Steel. One was high exposure to Europe where it faced high energy prices and tough carbon emission rules. For example, the relining of blast furnace number 6 at TSN took longer than expected. This affected production and caused an EBITDA loss of £368 million. It also earmarked ₹7,814 crore as exceptional costs for surrendering mining leases in Sukinda, Odisha, and for the employee separation scheme in Europe. Total debt was ₹87,082 crore at the FY24.

But, the T.V. Narendran-led steel giant has made a quick turnaround. The Tata Group firm is number one in the profit-to-loss category in the ₹1 lakh crore income band.

Turnaround Story