Target: ₹240
CMP: ₹205.45
We upgraded Tata Steel to Buy in Oct’25 at ₹177 and reiterated our positive stance on the name in our detailed steel thematic report in Jan’26. While the stock has performed well after our upgrade, we remain constructive on the stock on the back of a strong domestic demand outlook, safeguard duty-led price support, ongoing capacity expansions and a gradual turnaround in the EU business.
India’s steel demand is projected to grow by about 8-10 per cent over FY26-30, backed by a robust demand environment, policy support, and ongoing recovery in industry fundamentals. Tata Steel is aggressively expanding its capacity in India to capitalize on rising domestic demand, scaling from 26.5 mtpa in FY25 to 40 mtpa by FY31 over the medium term, with an annual capex commitment of ₹16,000 crore.
Recently, Tata Steel commissioned 5mtpa integrated capacity at Kalinganagar, increasing the plant’s total capacity to 8 mtpa (₹270 billion investment), with phase-III expansion targeting 13 mtpa. Tata Steel is transitioning into green steelmaking in Europe, where it is converting Port Talbot (UK) to a 3 mtpa EAF from conventional BF route steelmaking. The company is also exploring a gas-based DRI + EAF route at IJmuiden (the Netherlands), subject to policy clarity.
At CMP, Tata Steel is trading at 7.7x EV/EBITDA and 2.3x FY27E P/B. We maintain our Buy rating with an SoTP-based TP of ₹240 on Sep’27 estimate.
Published on February 19, 2026