Tata Steel pushes UK profitability target to FY29
Tata Steel Ltd has pushed back the target of making its UK business net profit-positive from 2025-26 to 2028-29, when the steelmaker completes its electric
Tata Steel Ltd has pushed back the target of making its UK business net profit-positive from 2025-26 to 2028-29, when the steelmaker completes its electric arc furnace (EAF) project in the country. Chandrasekaran said on Thursday that the UK business is expected to become Ebitda- and PAT-positive by FY29. “So, we hope to stem the losses, and this (EAF) project will be completed in FY29. At that time, the company should not just be Ebitda positive, it should also be PAT positive. That is the target that we have for the UK,” he told shareholders at this year's annual general meeting. Ebitda is short for earnings before interest, taxes, depreciation and amortization, while PAT stands for profit after tax. The revised deadline replaces the FY26 profitability goal Chandrasekaran had set for Tata Steel chief executive and managing director T.V. Narendran at last year's AGM. India is the primary market The chairman said Tata Steel has been working for years to address challenges in its overseas businesses while strengthening its India operations to mitigate the impact of international losses.
“There were a lot of questions about international operations and Europe and the UK and Canada and all these operations. See, this has been an issue that we have been trying to tackle for a number of years now. We have tackled it to some extent by increasing the Indian capacity significantly now,” he said. He added that India has become the company's “primary cash engine”, with domestic Ebitda increasing from just over ₹10,000 crore to around ₹30,000 crore over the past decade, providing the cash generation needed to support its international restructuring efforts. UK business turnaround Tata Steel is transforming its UK operations by replacing its blast furnaces with an EAF at Port Talbot under an agreement with the UK government, which is providing a substantial grant for the project. Both blast furnaces have already been shut down, and the company is currently operating only downstream facilities by processing imported steel slabs. Also Read | Tata Steel aims to repay overseas debt in two years; cuts FX borrowings Separately, Chandrasekaran said the commissioning of the EAF project has slipped to FY29 from FY28 because of delays in securing a power connection from the UK's Grid.
“The national grid is continuing to delay. It is causing us anxiety. Overall, that is why the project is not FY28; it is FY29. Any increase in cost, we are in discussion,” he said. While he did not directly link the profitability target to the project's revised timeline, his comments indicate that Tata Steel expects the turnaround of its UK business to be complete around the time the EAF becomes operational in FY29, marking a key milestone in the company's efforts to restructure its international operations. In the UK, the steelmaker is facing pressure from low-priced imports and subdued pricing. Despite final quota levels, Tata Steel UK CEO Rajesh Nair said in a June statement that final quotas do not “reflect UK market conditions or the pressures facing the domestic steel industry. In several categories, the quota volumes continue to allow significant import penetration into strategically important UK steel markets, exposing domestic production and supply chains to continued pressure”.
The BriefWire