Global Materials | Industrials | Commodities

Rahul Jain

Equity Bottom-Up

<ul>
<li>Tata Steel reported resilient India performance in Q4 FY25 with strong volumes, though consolidated margins remained under pressure due to ongoing European losses.</li>
<li>The Kalinganagar CRM line and Ludhiana EAF are progressing toward completion. The company’s $2.5 billion infusion into its overseas arm marks a strategic pivot, potentially weighing on returns.</li>
<li>We apply a lower EV/EBITDA multiple of 6x (vs. 7.5x earlier) to reflect the weaker capital allocation stance, flattish steel price outlook, and relatively subdued growth versus peers. </li>
</ul>


Tata Steel reported resilient India performance in Q4 FY25 with strong volumes, though consolidated margins remained under pressure due to ongoing European losses.
The Kalinganagar CRM line and Ludhiana EAF are progressing toward completion. The company’s $2.5 billion infusion into its overseas arm marks a strategic pivot, potentially weighing on returns.
We apply a lower EV/EBITDA multiple of 6x (vs. 7.5x earlier) to reflect the weaker capital allocation stance, flattish steel price outlook, and relatively subdued growth versus peers. 


Tata Steel: Strategic Pivot in Capital Allocation

<ul>
<li>Tata Steel’s India business is poised for multi-year volume expansion, backed by ample land availability across three key locations. </li>
<li>Losses from UK and Netherland operations set to ease. UK operations are under transitioning phase from BF to EAF. Discussions are on with the Netherlands govt. </li>
<li>Valuations: Tata Steel trades at 6.5x EV/EBITDA based on estimated FY26 EBITDA. Stock has outperformed local indices and could likely continue. </li>
</ul>


Tata Steel’s India business is poised for multi-year volume expansion, backed by ample land availability across three key locations. 
Losses from UK and Netherland operations set to ease. UK operations are under transitioning phase from BF to EAF. Discussions are on with the Netherlands govt. 
Valuations: Tata Steel trades at 6.5x EV/EBITDA based on estimated FY26 EBITDA. Stock has outperformed local indices and could likely continue. 


Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

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Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in line with our estimate.</li><li>Sales volume grew 8% YoY to 5.29 MT. Neelachal EBITDA grew impressively by 67% QoQ, and it is currently operating at rated capacity.</li><li>Cost at KPO-II will come as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in line with our estimate.Sales volume grew 8% YoY to 5.29 MT. Neelachal EBITDA grew impressively by 67% QoQ, and it is currently operating at rated capacity.Cost at KPO-II will come as it ramps up fully by FY27 due to operating leverage with its expansion from 3 to 8 MTPA. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in <a href="https://www.smartkarma.com/entities/kotak-mahindra-bank-ltd" target="_blank" data-smartkarma-citation="entities:126:1" rel="noopener">Kotak Mahindra Bank (KMB IN)</a>. Prior to that it had sold a similar amount in Mar 2022.</li>
<li>CPPIB will be released from its placement linked lockup early next month.</li>
<li>In this note, we will talk about the lockup dynamics and past deals performance.</li>
</ul>


In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in Mar 2022.
CPPIB will be released from its placement linked lockup early next month.
In this note, we will talk about the lockup dynamics and past deals performance.


Kotak Mahindra Bank - US$1.2 Billion Lockup Release

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

IDFC First Bank Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/idfc-first-bank-limited" target="_blank" data-smartkarma-citation="entities:26934:1" rel="noopener">IDFC First Bank Limited (IDFCBK IN)</a> plans to launch a Qualified Institutional Placement (QIP) of up to INR30bn (US$362m) in Oct 23, as per media reports. </li>
<li>On 22nd Sep 23, IFR had reported that IDFC First Bank is looking to launch a Qualified Institutional Placement (QIP) to raise up to INR30bn (US$362m) in Oct 23. </li>
<li>In this note, we will talk about the possible placement and other deal dynamics.</li>
</ul>



IDFC First Bank Limited (IDFCBK IN) plans to launch a Qualified Institutional Placement (QIP) of up to INR30bn (US$362m) in Oct 23, as per media reports. 
On 22nd Sep 23, IFR had reported that IDFC First Bank is looking to launch a Qualified Institutional Placement (QIP) to raise up to INR30bn (US$362m) in Oct 23. 
In this note, we will talk about the possible placement and other deal dynamics.


IDFC First Bank Early Look - Likely to Be an Accretive Deal but Not Particularly Cheap

India

Tata Steel Ltd. is an integrated steel producer which manufactures a variety of steel products. The Company's products include steel ball bearing rings, alloy steel bearing rings, annular forgings, flanges, bearings, welded steel tubes, cold rolled strips and seamless tubes. Tata Steel also manufactures metallurgical machinery.

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Tata Steel Ltd (TATA IN)

Tata Steel: Strategic Pivot in Capital Allocation

Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Rahul Jain

Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...

Rahul Jain

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in...

Axis Direct

Kotak Mahindra Bank - US$1.2 Billion Lockup Release

In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in...

Sumeet Singh

IDFC First Bank Early Look - Likely to Be an Accretive Deal but Not Particularly Cheap

IDFC First Bank has launched its QIP at an issue price of INR 90.25 (4.14% discount to the 3rd Oct 23 close price and 4.95% discount to the floor...

Ethan Aw

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Tata Steel: Strategic Pivot in Capital Allocation

​Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Rahul Jain

Tata Steel (TATA IN): Scaling Up Domestic Operations, Easing EU Drag

​Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...

Rahul Jain

Tata Steel Ltd - Resilient Q3 Performance; Europe Losses Narrow

Indian operations stood resilient: Indian Adj EBITDA (excl. one-time benefit of provision) stood at Rs 6,110 Cr (down 26%/9% YoY/QoQ), largely in...

Axis Direct

Kotak Mahindra Bank - US$1.2 Billion Lockup Release

In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in...

Sumeet Singh

IDFC First Bank Early Look - Likely to Be an Accretive Deal but Not Particularly Cheap

IDFC First Bank has launched its QIP at an issue price of INR 90.25 (4.14% discount to the 3rd Oct 23 close price and 4.95% discount to the floor...

Ethan Aw

Tata Steel's strong India performance in Q4 FY25 overshadowed by ongoing European losses, with strategic pivot and lower EV/EBITDA multiple...

Tata Steel's India business set for strong volume growth, losses from UK and Netherlands operations expected to ease, stock trading at attractive...