Target: ₹210
CMP: ₹181.85
is aggressively expanding its capacity in India to capitalise on rising domestic demand, targeting an increase from 26.5mtpa in FY25 to 40mtpa by FY30.
The company has commissioned a 5mtpa integrated capacity at Kalinganagar, increasing the plant’s total capacity to 8mtpa (₹27,000 croreinvestment), with phase-III expansion targeting 13mtpa.
Other key projects include scaling NINL from 1mtpa to 4.5mtpa, a 0.75mtpa electric arc furnace (EAF) at Ludhiana by FY27, and expanding Meramandali from 5.6mtpa to 8.2mtpa.
In Europe, Tata Steel is transitioning to green steelmaking, converting Port Talbot (UK) to a 3mtpa EAF and exploring a gas-based DRI + EAF route at IJmuiden (Netherlands), subject to policy clarity.
Tata Steel is one of the largest players in India’s steel sector and is set to benefit from improving steel price realizations, operating efficiencies, and the strong domestic demand outlook.
The implementation of the safeguard duty is expected to help domestic operations achieve better realisation. While near-term challenges persist due to global uncertainty around tariff escalations, the long-term outlook for TATA remains strong.
The Indian business is expected to continue its strong performance, and an improvement in the European business performance is likely to support overall earnings.
At CMP, Tata Steel is trading at 6.8x EV/EBITDA and 1.9x FY27E P/B. We upgrade the stock from Neutral to BUY with an SOTP-based TP of ₹210 on Sep’27 estimate.