Nuvama Institutional Equities has maintained a ‘Hold’ rating on Tata Steel with a target price of ₹175, implying an upside of about 5% from the current market price of ₹166.40. The brokerage’s stance reflects a balance between Tata Steel’s long-term domestic growth plans and near-term pressures from softer steel prices.
In its latest note, Nuvama highlighted Tata Steel’s recently unveiled growth roadmap, under which the company could add around 10 million tonnes per annum (mtpa) of steelmaking capacity in India in a phased manner by FY32. This expansion would take Tata Steel’s domestic capacity to about 37 mtpa and mark its entry into Maharashtra for crude steel production.
While the company has not yet disclosed detailed capital expenditure plans, Nuvama estimates total growth capex of ₹950–1,000 billion over the next six years. Of this, around ₹700–750 billion is expected to be deployed in India, with the remaining ₹250 billion earmarked for Europe, assuming all proposed projects move ahead as planned. The brokerage believes the expansion can largely be funded through internal accruals, and Tata Steel’s net debt is unlikely to rise meaningfully despite the scale of investment.
However, Nuvama has moderated its near-term earnings outlook amid a weaker steel price environment. It has cut its FY26E and FY27E EBITDA estimates by 5% and 3%, respectively, reflecting lower realised steel prices, even as it continues to factor in a price recovery of ₹3,000–3,500 per tonne in Q4 FY26.
Overall, Nuvama sees Tata Steel’s long-term capacity expansion strategy as structurally positive but believes near-term pricing headwinds and execution-related uncertainties warrant a cautious ‘Hold’ stance at current levels.
Disclaimer: This article is based on a brokerage report by Nuvama Institutional Equities. The views expressed are those of the brokerage and are for informational purposes only. This content does not constitute investment advice or a recommendation to buy or sell any securities.