Tata Steel believes that its UK operations will break even in the next couple of quarters, while Europe operations are expected to break even in 1Q itself
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FRANCIS MASCARENHAS

Tata Steel shares gained traction, surging 5 per cent, on Wednesday as brokerages cheered the company’s Q4 performance, driven by seasonally higher volumes and a marginal increase in realisations.

The steel major’s consolidated net profit in Q4FY25 doubled to ₹1,201 crore due to improved cost efficiencies, lower raw material costs and higher other income.

The company believes that UK operations will break even in the next couple of quarters, while Europe operations are expected to break even in 1Q itself. Capex guidance for FY26 stands at ₹15,000 crore.

Brokerages expressed optimistic calls as the Q4 numbers met consensus estimates. ICICI Securities stressed that the management’s focus on cost reduction and deleveraging is likely to be the key stock mover. The brokerage increased the target price on the stock from ₹180 to ₹190, maintaining buy.

According to Axis Securities, the q-o-q revenue increase was led by improved sales volumes (both Europe and India), partially offset by a drop in realisations in the UK and Netherlands. The analysts retained buy at a revised target price of ₹170 from ₹150 earlier.

Nuvama Institutional Equities has upgraded the stock to buy at an increased target price of ₹177. Nuvama has raised FY27 EBITDA estimates by 6 per cent to factor in higher profits in Europe amid lower fixed cost.

Elara Capital analysts revised ratings from buy to accumulate at ₹163 per share. They flagged higher imports, delayed ramp-up of recently added capacity, unprecedented rise in coking coal and iron ore prices, and demand slowdown as key risks.

Motilal Oswal mentioned that steel prices would edge higher in Q1FY26, due to imposition of safeguard duty and lower imports. However, the long-term outlook remains strong for Tata Steel, according to the brokerage. “While India business is expected to continue its strong performance, improving performance in Europe business would support overall earnings,” it said. Motilal has reiterated neutral rating at a revised target price of ₹155 per share.

Tata Steel shares traded at ₹155.90 as at 11.29 am on the BSE, higher by 4.28 per cent, close to its intraday high of ₹157.15.

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Published on May 14, 2025