Chief Financial Officer Koushik Chatterjee stated that Tata Steel’s growth strategy will prioritize financial prudence, ensuring that expansion does not come at the cost of rising debt. The company plans to balance internal accruals and deleveraging to sustain its financial health.
Tata Steel has revised its breakeven timeline for UK operations, projecting a delay of six months. The UK business is expected to break even in the first quarters of the next financial year against an earlier expectation of the second half of the current fiscal year according to Economic Times.
“Our capital allocation is very clear that we will not want to have the growth at the cost of debt,” he told analysts on Tuesday, adding that the company aims to reduce its net debt-to-EBITDA ratio from the current 3.3 to below 3.0.
China’s steel exports that are excessively imported at sharp discounts have impacted the prices of alloys across the globe. It has, in turn, impacted the profitability of Indian producers that are amidst the expansion of their production capacities.
Chatterjee said that a series of measures to cut costs and bring in operational efficiencies would help combat the reduced market conditions, inclusive of better inventory management, improved terms for credit, and optimising blends.
While Tata Steel managed to bring down its net debt by ₹3,000 crore to ₹85,800 crore at the end of December, its leverage ratio inched higher.
“With more and more volumes coming in out of India, the UK going towards a breakeven and a huge structural programme being taken out of the Netherlands, our intend is certainly to bring the debt level below 3.0,” Chatterjee said. “The range at which we should be comfortable is somewhere around 2.75, including the growth,” he said.
The complete benefit of the company’s Kalinganagar operations will start coming in from September 2026 and Tata Steel will be spending around ₹3000 crore more for the capital expenditure of the plant.