Moody's said looking ahead, it expects the production

ramp-up phase of the Kalinganagar operations and the resulting absorption of fixed costs to translate into improvement in EBITDA/tonne over the coming quarters.

Moody s also pointed out that TSI s backward integrated operations with 100 per cent captive iron ore supplies and 60 per cent captive coking coal supplies position Tata Steel competitively, in a rising raw material price environment.

It said the continuation of the government measures to protect the domestic steel industry is imperative, especially with the global and regional overcapacity of steel.

As for the strong performance of Tata Steel s European operations (TSE), this result reflected the restructuring of the UK business, operational improvements on the back of cost reductions and improved market conditions, it said.

TSE revenue of Rs 380 billion during April-December 2016 was down 11 per cent from the same period the year before, because deliveries were impacted by the company s decision to reduce production volume in order to focus on higher value-added products in the UK, it said.

"Nevertheless, EBITDA turned positive, registering Rs 25 billion from negative Rs 7 billion in April-December 2015, reflecting the depreciation of the British pound relative to the Euro, a lower cost base in the UK, and more favourable market conditions," Moody's said.

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)