Tata Steel Beats Estimates; Audit Qualification Flags Risk

TATASTEEL reported its Q2 FY27 results today, Saturday, Nov 7, with consolidated net profit of ₹3,699.59 crore, about 14% above the Bloomberg consensus of ₹3,254 crore. EBITDA of ₹10,665 crore also beat estimates. The standalone results carry a qualified audit opinion tied to uncertainties at Tata Steel Nederland, which is a risk flag. The numbers should support the stock on Monday, but it has already rallied about 11% into the results. Revenue: Consolidated revenue was ₹65,436 crore, about 2% above the Bloomberg estimate of ₹64,152 crore. EBITDA: It was ₹10,665 crore, up 14% quarter-on-quarter and 17% year-on-year, with a margin of about 16%. That is roughly 2.5-4% above analyst estimates of ₹10,228-10,400 crore. India business: Revenue was ₹42,653 crore with EBITDA of ₹10,634 crore, a margin of about 25%, which is the profit engine. First half: H1 revenue was ₹1,26,231 crore and consolidated EBITDA ₹20,035 crore, up 21% year-on-year. Balance sheet: Net debt was ₹91,423 crore, or 2.4 times EBITDA, which is an improvement from about 3 times a year ago. Audit qualification: The standalone results received a qualified opinion because of significant uncertainties at its step-down subsidiary, Tata Steel Nederland B.V. Standalone net profit was ₹5,053.64 crore, lower than a year earlier. Board change: The board also named Noel Naval Tata Vice Chairman, effective Nov 11. Stock setup: The shares closed Friday at ₹186.30, up 2.36%. They are up about 11% since Oct 30 after a 5% jump on Nov 2 that was the biggest single-day gain in 14 months. They are still about 17% below the 52-week high of ₹224.40, at roughly 20 times earnings with a dividend yield of about 2.2%.