Tata Steel, a leading player in global and domestic markets, released its provisional numbers for the June 2026 quarter late on Wednesday evening. Tata Steel’s key Indian operations reported a strong 8.8% y-o-y growth in steel delivery volumes to 5.17 million tonnes. The above data for Q1FY27 is not only critical for understanding the performance of the company but it also gives an insight on the level of activity in key user industries like automobiles, construction and white goods, amongst others.
Since the end of February 2026, the global economy has been facing the impact from the Middle East war. And for the Indian economy, various international agencies have downgraded the growth forecast to 6.5% to 7% for FY27. The Indian economy had grown nearly 7.7% y-o-y in FY26. The central government has not yet declared the growth for the June 2026 quarter.
The company has highlighted enhanced deliveries in the June 2026 quarter from higher output at its Jamshedpur and Kalinganagar facilities.
Strong demand from user industries powers local deliveries
| million tonnes | % change y-o-y | |
| Tata Steel (domestic delivery volumes) | 5.17 million tonnes | 8.8% |
Capitalizing on Capacity: The Kalinganagar Impact
The Tata-controlled steel company benefited from its recent expansion, which increased capacity from nearly 3 million to nearly 8 million tonnes at its Kalinganagar, Orissa facilities. The expanded local capacity of Tata Steel comes at a time when user industries like two-wheelers and four-wheelers have enjoyed buoyant sales in the June 2026 quarter.
Tata Steel has highlighted that its automotive and special products vertical achieved ‘best-ever 1Q’ volumes of nearly 0.9 million tons in the June 2026 quarter. Also, demand for the local construction sector was strong with Tata Steel highlighting Tata Tiscon (its branded steel products for the sector) achieved ‘best-ever 1Q’ volumes and grew 33% y-o-y in the June 2026 quarter.
Tata Steel had reported a lacklustre performance, in terms of delivery volumes in the June 2025 quarter with 4.75 million tonnes as compared to 4.94 million tonnes a year earlier.
Tata Steel ended FY26 with a capacity of 36 million tonnes, with a domestic capacity of nearly 26.1 million tonnes.
European operations – Continued impact from Ukraine and Middle East crisis
The strong performance at its Indian operations contrasts with the sluggish performance at the company’s operations in Netherlands and the UK.
At its Netherlands operations, delivery volumes were 1.4 million tonnes in the June 2026 quarter as compared to 1.5 million tonnes a year earlier. The company has highlighted that deliveries in Q1FY27 were impacted in part due to the shutdown of Direct Sheet Plant in April 2026. It also added that the local environment authority has permitted Tata Steel Netherlands to carry out trial runs, which are ongoing, ahead of restart of full operations.
European operations – Sluggish demand and regional wars have an impact in June 2026 quarter
| Million tonnes | % change y-o-y | |
| Tata Steel Netherlands | 1.4 million tonnes | -6.6% y-o-y |
| Tata Steel UK | 0.48 million tonnes | -20% y-o-y |
Apart from that, the Ukraine and Middle East war had led to a surge in crude prices in the June 2026 quarter, and European consumers had turned very cautious. Numerous economic surveys have pointed to broad stagnation in the key French and German economies in the June 2026 quarter.
UK Operations: Navigating Subdued Demand and Green Transitions
Delivery volumes were also subdued in the UK operations in the June 2026 quarter – its delivery volumes were 0.48 million tonnes in Q1FY26, a decline of nearly 20% y-o-y.
At its UK operations, the company is currently servicing customers largely with imported steel slabs and they are further processed into higher value steel products at its service centres across that country.
At its UK operations, the company is working on a £1.25 billion (nearly Rs 16,000 crore) electric arc furnace (EAF) at Port Talbot, and it would have a capacity of 3 million tonnes, when commissioned in end 2027.
The above steel plant would cut emissions by nearly 90%, as per various estimates. The transition at Tata Steel UK is being part funded via nearly £ 500 million (almost Rs 7,000 crore) from the UK government.
However, strong performance at its Indian operations helped Tata Steel’s total delivery volumes reach 7.38 million tonnes in the June 2026 quarter, a rise of 2.6% y-o-y.
Tata Steel’s capacity versus Indian steel producers
Tata Steel ended FY26 with a capacity of 36 million tonnes across its Indian and global operations.
Meanwhile, JSW Steel ended FY26 with a combined crude steel capacity of 37.9 million tonnes including 4.5 million tonnes through the JSW JFE Steel JV. And the Steel Authority of India (SAIL) had a capacity of nearly 19 million tonnes at the end of FY25. The PSU steel company has not published its annual report for FY26.
Chinese steel output declines in 2026 and higher global steel prices
The Chinese steel industry, the world’s biggest steel producer, has been reeling from the collapse in its key user industries, like the local construction sector, coupled with protective import tariffs imposed by USA, EU and the Indian government.
As a result, during January–May of 2026, cumulative Chinese steel output fell 3.9% y-o-y to 415.5 million tonnes, as per data from the global industry body, World Steel Association and global media reports.
Reduced steel output from China in the current calendar year coupled with higher shipping freight charges has led to a broad rise in steel prices by nearly 3% to 5% y-o-y in the June 2026 quarter.
Valuations – Does SAIL’s valuations put it on the watch list of stocks?
| Steel company | Consolidated P/E |
| Tata Steel | 20.8 times |
| JSW Steel | 32.6 times |
| SAIL | 17.9 times |
Tata Steel had declared its provisional update after the close of Wednesday trading, and on Thursday, the stock ended broadly flat at Rs 187.8. The stock trades at a consolidated P/E of 20.8 times. Over the past 5 years, the stock has traded at a P/E between 4.2 times and 183.2 times.
Meanwhile, JSW Steel ended 0.4% higher at Rs 1,224.4 on Thursday. The stock trades at a consolidated P/E of 32.6. Over the past 5 years, the stock has traded at a P/E between 6.4 times and 73.6 times.
And SAIL ended 2.4% higher at Rs 165.9 on Thursday. The stock trades at a consolidated P/E of 17.9 times. Over the past 5 years, the stock has traded at a P/E between 2.3 times and 29.4 times,
Steel stocks, like non-ferrous stocks, tend to be quite volatile and respond almost immediately to changes in the global economy and trade cycles. SAIL trades at valuations lower than its peers and could be added to the watch list of stocks for 2026.
Disclaimer:
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
Disclaimer: The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary.