Cost takeout to continue in coming quarters to maintain profitability: Tata Steel CFO

New Delhi, Jul 31 (PTI) Tata Steel will continue with its cost takeout programme in the coming quarters of the ongoing fiscal year in a bid to maintain profitability, the company's Chief Financial Officer (CFO) Koushik Chatterjee said on Thursday.

The Tata Group entity on Wednesday saw its consolidated net profit more than doubled to Rs 2,007.36 crore during the June quarter, despite volatile global macro conditions and heightened uncertainty.

"The strong improvement in our Q1 performance on QoQ as well as YoY basis was driven by an increase in our net steel realisations and the planned cost takeouts," Tata Steel CEO & MD T V Narendran said.

In financial terms, cost takeout refers to strategic cost reduction measures taken by companies by removing unnecessary expenses to improve profitability and efficiency.

Tata Steel has delivered resilient performance and sequentially improved margins by around 200 bps despite challenging demand and uncertainty on trade and tariffs, said Chatterjee, who is also the Executive Director (ED) of Tata Steel.

Asked for strategies for the remaining FY25 to maintain profitability, the CFO said "...the cost takeout will continue... So hopefully we should be in good space unless there is some big issues, not in India, but European tariff and trade issues play differently." Consolidated revenues are expected to continue to improve and increase as far as Q2 is concerned, while it is too early to talk about Q3 and Q4 at this point of time, he said.

Narendran said "going forward we expect the volumes to go up but the revenue at least in India rupees per tonne will come down. We are saying that this quarter (Q2) will be about Rs 2,000/tonne below Q1, but the volumes will be higher in India. In the Netherlands and the UK the revenues will not come down per tonne, may go up a little bit more and volumes should also not come down." On the US' tariff announcement, the CEO said Tata Steel is not statistically impacted in any material way as its doesn't export to the US from India. So there's no direct impact.

Indirectly, also maybe some of the company's customers to whom it sells steel to export to the US, but it's not a big material number. So there is no material impact on tariffs, he added.

Tata Steel, which is expanding operations in India and is in a transition phase in Europe, is targeting cost takeouts of Rs 11,500 crore (about USD 1.3 billion) across geographies by focusing on controllable costs. PTI ABI TRB