CLSA has maintained its Hold rating on Tata Steel and set a target price of ₹145, following the company’s announcement of a significant cost-saving transformation programme at its Netherlands operations. The one-year initiative aims to reduce controllable costs—currently 40% of total operating costs—by 15%.
The programme includes rationalising workforce (1,600 job cuts out of 9,000 employees), boosting plant efficiency, and optimising product mix. These measures are expected to generate €500 million in savings in FY26 and another €50–60 million in FY27. On a 7mt volume base, CLSA estimates this could improve profitability by around €80 per tonne.
However, the brokerage noted that some of these gains have already been factored into its existing FY26/FY27 estimates, which forecast EBITDA per tonne of $57 and $60 respectively. “We will wait to see any incremental EBITDA improvement over our estimates resulting from this programme,” CLSA said.
CLSA added that in a scenario where Tata Steel delivers an additional US$250 million in EBITDA from the transformation, the stock could see a 5% valuation accretion based on a 4x EV/EBITDA multiple.
Disclaimer: The above views are of the broker’s and not the author or the publication’s. Please make any and every investment decision after consulting your financial advisor.
