Target: ₹223
CMP: ₹202.10
Tata Steel’s Q3FY26 performance was above our expectations. Revenue fell 3 per cent QoQ to ₹57,000 crore, driven by 4 per cent QoQ increase in volumes, aided by strong growth in India operations.
This was offset by a 6 per cent QoQ decrease in realizations owing to weak steel prices. Consolidated EBITDA declined 11 per cent QoQ to ₹8,200 crore, with EBITDA/t declining 11 per cent QoQ to ₹9,987.
UK operations saw EBITDA loss widen to ₹14,199/t in Q3FY26 from ₹13,510/t in Q2FY26 owing to subdued demand and pricing. The Netherlands business posted EBITDA of ₹4,068/t, down from ₹5,948/t in Q2FY26 amid pressure from regulatory burdens. The cost transformation program achieved ₹8,600 crore in cost saving during 9MFY26.
The company completed the acquisition of a 50.01 per cent stake in Thani Pellets and consolidated its colorcoded business. Expansion strategy focuses on the East Coast (Odisha) with an opportunity to reach 35 million tons, while a greenfield site in Maharashtra offers optionality for western and southern markets. The Ludhiana plant is expected to commence operations by mid-March.Management anticipates an EBITDA expansion in Q4 FY26 due to volume growth and cost-takeout benefits, particularly in the Netherlands and India.
We roll over to FY28E estimate and assign an EV/EBITDA multiple of 7.5x to FY28E EBITDA to derive target price of ₹223 and maintain HOLD rating on the stock.
Published on February 9, 2026