Tata Steel: The domestic volume story is improving

Tata Steel Limited

has reported a much stronger domestic operating performance for Q2 FY27. India crude steel production increased 10% year on year to **6.21 million tonnes**, while India deliveries rose 7% to **5.97 million tonnes**. The sequential improvement is even more interesting. Production: 6.21 MT vs 5.76 MT Deliveries: 5.97 MT vs 5.17 MT That means production increased 8% sequentially, while deliveries jumped 15%. Where is the growth coming from? Automotive & Special Products delivered its best-ever second-quarter volume at approximately 1.1 million tonnes, up 19% year on year. Branded Products & Retail also recorded its best-ever quarterly volume at around 2.2 million tonnes. The company said demand remained stable across market segments despite seasonal rains. There is another interesting number: Tata Steel's e-commerce platforms generated ₹2,860 crore of GMV during the quarter, up 30% sequentially. But this is not a complete earnings story yet Steel volumes tell us about operating activity. They do not tell us the final profit. Realisation per tonne, coking-coal costs, steel prices and overseas operations will determine how much of this volume improvement reaches EBITDA. The European operations remain a mixed picture, with Netherlands production and deliveries lower than the year-ago period and UK deliveries affected by inventory build-up. Bottom line India operations are showing clear volume momentum. I would now wait for the financial results to see whether the volume recovery is accompanied by better spreads. My stance: Constructive on domestic operations; neutral on the consolidated earnings picture until margins are visible. Research note: Information compiled from the company's provisional Q2 production and delivery release. [I do not hold TATASTEEL]. This is not a recommendation to buy or sell.