Global rating agency Moody's on Wednesday maintained a stable outlook for Tata Steel. Earnings expected to improve in next 2 financial years Moody's Ratings on Wednesday said it has maintained a stable outlook on Tata Steel, expecting the domestic steel major to improve its earnings over the next two financial years. According to PTI news, Moody's said in a report that it expects Tata Steel's consolidated EBITDA to be around Rs 290 billion in the financial year ending March 2025 and Rs 380 billion in the financial year 2026, from Rs 241 billion in 2023-24.

A stable outlook reflects expectations from the company

According to the news, Moody's Ratings Assistant Vice President and Analyst Hui Ting Sim said that the rating affirmation and stable outlook reflect our expectation that the structural improvement in Tata Steel's earnings over the next two years will mitigate the risks associated with new state taxes on mining activities in India and growth in its operations in Europe. Its forecast assumes that Tata Steel's India operations will generate EBITDA of Rs 14,700-15,300 per tonne before state mining taxes in FY2025 and FY2026, which is in line with the company's eight-year average earnings.

Tata Steel's steel delivery expected to increase

Rating agency Moody's expects Tata Steel's steel deliveries in India to gradually increase to about 23 million tonnes by FY26 from 20 million tonnes in the last fiscal, driven by the addition of five million tonnes of production capacity at Kalinganagar in Odisha. Tata Steel's operations in Europe will also grow over the next two years, boosting its EBITDA (earnings before interest, tax, depreciation, and amortization) to about Rs 30 billion in FY26 from slightly negative in FY25.

Profitability at the Netherlands plant will recover in FY24 after losses caused by operational disruptions due to the relining of its blast furnace. Losses at its UK operations will also narrow after the closure of the loss-making blast furnace. Tata Steel is one of the top three steelmakers with offshore operations in India.

Tata Steel's share price

Tata Steel's share price closed at Rs 153.70 on Wednesday, down 0.65 percent from the previous trading session. The stock has given a return of just 0.42 percent in the last week, while it has given a return of 31.32 percent in one year.