Tata Steel Expects UK Business To Turn Ebitda Positive In FY26, Says CEO TV Narendran

Tata Steel Ltd. expects its UK operations will turn Ebitda positive in financial year 2026, marking a major shift in the performance of its European business.

Chief Executive Officer and Managing Director, TV Narendran told NDTV Profit that the European business—once a drag on the company’s Indian operations—is undergoing significant transformation and will no longer weigh down overall performance.

In the UK, Tata Steel has undertaken an aggressive cost reduction exercise, having already removed 230 million pounds in fixed costs last year and cut an equivalent amount in financial year 2025. While market conditions in the UK remain challenging—partly because the region does not have benefit of quotas like the EU—the cost discipline is expected to drive a positive Ebitda outcome in fiscal 2026.

The company is also pressing ahead with its 1.25 billion pounds investment in UK for Electric Arc Furnace at the Port Talbot steelworks in Wales, supported by a 500 million pound grant from the government. Planning permissions have been obtained, and full clearance is expected by June, with construction set to begin in July. Equipment orders are in place, and the UK project is on track to be operational by fiscal 2027.

Meanwhile, Tata Steel Netherlands is poised for improved performance, buoyed by easing raw material prices and better spreads in the European market due to protective tariffs and quotas. Finanacial year 2026 should see a marked improvement in Ebitda in the Netherlands as transformation efforts bear fruit.

Narendran affirmed that the European business will no longer drag on the Indian operations. In financial year 2024, both the Netherlands and UK businesses had a negative impact, but by fiscal 2026, the entire European segment is expected to contribute positively to consolidated Ebitda.

In India, the company remains focused on growth and efficiency. Nearly 80% of the firm’s capex, estimated at around Rs 15,000 crore annually for financial year 2026 and fiscal 2027, will be invested domestically. This includes completing the Kalinganagar expansion, a new blast furnace in Ludhiana, and continued investment in iron ore mining to support its growing operations.

Tata Steel expects Indian steel production to rise to 26 million tonnes in this fiscal from 25 million tonnes in the previous financial year, with net volume growth of 1.5 million tonnes. The company is also working to rebalance its debt portfolio by onshoring offshore borrowings without increasing leverage, aligning more debt with cash-generating Indian operations.

Steel prices are expected to remain stable, despite persistent geopolitical headwinds. With a strong focus on cost optimisation across regions, the company sees a clear path to improved margins. “We’re chasing our numbers and expect to deliver them in FY26,” Narendran concluded.