I'm LongbridgeAI, I can summarize articles.Anand Rathi has upgraded Tata Steel to 'Buy', citing strong global pricing trends and a positive earnings outlook. The brokerage expects margin expansion driven by firm European pricing and robust domestic demand, raising Ebitda estimates for FY26, FY27, and FY28. The target price is revised to ₹240, indicating a 24% upside from the current price of ₹193. Tata Steel's UK operations are expected to break even by FY27, while domestic capacity is projected to reach 40 million tonnes. Key risks include sustained losses in UK operations and potential delays in domestic capex.
Tata Steel share price today: Domestic brokerage Anand Rathi Shares & Stock Brokers has upgraded the diversified steel producer Tata Steel to ‘Buy’, citing improving global pricing trends and a strengthening earnings outlook.
According to Anand Rathi, a combination of firm European pricing, robust domestic demand, improving product mix, and expected price hikes in automotive contracts from April 2026 will drive margin expansion. Considering these factors, the brokerage has raised its Ebitda estimates by 3.1 per cent, 7.6 per cent, and 5.6 per cent for FY26, FY27, and FY28, respectively. It now expects a more sustainable earnings trajectory as UK operations stabilise and domestic capacity scales up toward 40 million tonnes.
The brokerage has revised the target price to ₹240, based on FY28e SoTP valuation. The target implies a potential upside of 24 per cent from Monday, March 30, closing price of ₹193 on the NSE. The company has a total market capitalisation of ₹2.39 trillion.
On Wednesday, the stock opened at ₹200, up 3.5 per cent from previous session's close. At the time of writing, the stock was trading at ₹196.61, up 2.48 per cent. In comparison, the benchmark NSE Nifty50 was quoting at 22,896.15 levels, up by 564.75 points or 2.53 per cent.
Here's why Anand Rathi is bullish on Tata Steel:
UK expected to break even in FY27
According to the brokerage, the implementation of the Carbon Border Adjustment Mechanism (CBAM) in January 2026 has coincided with a steady rise in European steel prices, which have climbed around $100 per tonne over the past three months, benefiting players like Tata Steel.
Additionally, the UK government’s move to align its steel import quota framework with European norms is seen as a structural tailwind. With tighter quotas expected from July 2026, the brokerage expects lower import pressure, supporting a more favourable operating environment for Tata Steel’s European business.
It expects the company’s UK operations to reach Ebitda breakeven by the second half of FY27, marking a key turning point for overall profitability. Ebitda stands for earnings before interest, tax, depreciation, and amortisation.
"This should create a more level playing field, aiding order book stability and utilisation. We expect the UK business to turn ‘back into the black’ by Q4FY27, marking a key turnaround milestone," the brokerage said.
40m tonnes domestic capacity
On the domestic front, analysts said a sharp rebound in steel realisations, with Q4 average HRC and rebar prices rising around 14.8 per cent and 20.7 per cent quarter-on-quarter (Q-o-Q), respectively. This improvement is tracking ahead of management’s earlier guidance and is likely to support standalone Ebitda per tonne above ₹15,000, indicating a stronger exit momentum into FY27.
Additionally, the Phase-I expansion at NINL is expected to increase capacity to around 5.8 million tonnes. The company is then likely to prioritise a 2.5 million tonne flat steel expansion at Meramandali. Beyond this, it retains the flexibility to either scale up TSK capacity to around 13 million tonnes or pursue a greenfield project in Maharashtra, supporting its long-term goal of reaching around 40 million tonnes.
"Operationally, Tata Steel continues to strengthen its India footprint with commissioning of 0.75m tonnes EAF facility at Ludhiana, taking domestic capacity to 27.35m tonnes. While legacy packaging contracts in the Netherlands may cap near-term ASP expansion, this is likely to be transient," the brokerage said in its note. However, the brokerage highlighted sustained losses in UK operations, delays in domestic capex, and downcycle in steel prices among key risks for the firm. Disclaimer: Views and outlook shared belong to the brokerage/analysts and are not endorsed by Business Standard. Readers' discretion is advised.