Tata Steel Q4 FY26 Results (NSE: TATASTEEL)
Signal: Margin expansion
The read
Tata Steel delivered its 7th consecutive quarter of margin expansion with OPM at 16% (+400bps YoY) as input cost tailwinds (coking coal) and operating leverage on higher volumes combined to drive PAT of ₹2,965 Cr, +125% YoY. Revenue inflection to +12.5% YoY growth (vs -4.2% in Q4FY26) was volume-led with India crude steel output +11% and domestic deliveries +11%. The standalone entity remains highly profitable (PAT ₹4,536 Cr), while the consolidated number reflects persistent drag from European/overseas subsidiaries (~₹1,571 Cr net loss). The board approved a massive ₹33,873 Cr capex for 4.8 MTPA expansion at NINL, signalling confidence in long-term demand.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹63,270 Cr | +12.5% | +11.0% |
| EBIT | ₹10,119.36 Cr | +47.2% | |
| Net profit | ₹2,965 Cr | +125.0% | |
| EPS | ₹2.34 | +125.0% | |
| EBIT margin | 16% |
P&L walk
Revenue growth accelerated to +12.5% YoY (Q4FY26: -4.2% YoY) driven by 11% higher India volumes; OPM expanded 400bps YoY to 16% — 7th straight quarter of margin expansion — as input cost tailwind (coking coal) combined with operating leverage on fixed costs; finance cost rose 7% to ₹1,357 Cr while depreciation jumped 36% to ₹2,205 Cr reflecting fresh capex capitalisation; standalone PAT ₹4,536 Cr grew 29% YoY but consolidated PAT of ₹2,965 Cr implies ~₹1,571 Cr drag from subsidiaries (mainly European/overseas operations)
Key positives
- Q4FY26 consolidated revenue ₹63,270 Cr, +12.5% YoY — first quarter of double-digit growth after four quarters of contraction
- OPM expanded 400bps YoY to 16% — 7th consecutive quarter of margin expansion, a structurally significant trend
- Consolidated PAT ₹2,965 Cr, +125% YoY — earnings now at multi-year high quarterly run-rate
- India crude steel production +11% YoY to 5.82mt and domestic deliveries +11% to 5.17mt — strong volume momentum
- Standalone PAT ₹4,536 Cr, +28.7% YoY — core Indian operations highly profitable with implied standalone OPM >16%
- Board approved ₹33,873 Cr capex for 4.8 MTPA NINL expansion — significant growth capex in long products/retail segment
Key concerns
- Consolidated PAT of ₹2,965 Cr is substantially below standalone PAT of ₹4,536 Cr — implying ~₹1,571 Cr loss from subsidiaries, primarily European operations, which remains a persistent drag
- Exceptional items in standalone: net loss of ₹291.50 Cr including restructuring provisions of ₹261 Cr — ongoing cost optimisation
- Depreciation jumped 35.6% YoY to ₹2,205 Cr as new capex capitalises — will pressure future margins if revenue growth slows
- Sequential QoQ revenue growth of +11% partly reflects Q4 seasonal recovery; sustainability of +12.5% YoY pace needs monitoring
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