Tata Steel Share Price Could Reach Rs 230: ICICI Securities
ICICI Securities has retained its BUY call on Tata Steel with a revised sum-of-the-parts target of Rs 230, implying 24% upside from Rs 185 over 12 months. The steelmaker posted a steady September quarter: consolidated revenue rose 11.5% to Rs 65,436 crore, EBITDA climbed 18.4% to Rs 10,533 crore with margins at 16.1%, and profit after minority interest increased 18.2% to Rs 3,666 crore. Indian EBITDA per tonne eased to Rs 17,420 on dearer coking coal and freight, while the Netherlands recovered sharply. The brokerage expects price hikes, a Rs 7,000 crore cost programme and capacity additions to lift consolidated EBITDA at a 17.6% annual clip through FY29.
BUY · RETAINEDQ2FY27 Result UpdateMetals · Steel
Tata Steel: ICICI Securities Sees 24% Upside as Price Hikes, Cost Cuts and New Capacity Heat Up Earnings
The brokerage's sum-of-the-parts model pours out a Rs 230 target as Indian volumes grow, the Netherlands recovers and the UK heads for breakeven.
Cast target · 12 months
Rs 230
from CMP Rs 185 · upside 24%
52-wk Rs 160 to Rs 224 · Nov 9, 2026
The quarter, certified
Tata Steel delivered what ICICI Securities calls a steady second quarter. Consolidated operating income rose 11.5% to Rs 65,436 crore on flat steel deliveries of about 79 lakh tonnes, so the lift came from price and mix rather than tonnage. Indian sales volume climbed 7.7% to 57 lakh tonnes, while blended Indian realisation of Rs 74,010 per tonne was 13.9% higher than a year ago but Rs 721 lower sequentially.
| Parameter | Q2FY27 | Q2FY26 | YoY | Q1FY27 | QoQ | Grade |
|---|---|---|---|---|---|---|
| Operating income | 65,436 | 58,689 | +11.5% | 60,794 | +7.6% | PASS |
| EBITDA | 10,533 | 8,897 | +18.4% | 9,264 | +13.7% | PASS |
| EBITDA margin | 16.1% | 15.2% | +94 bps | 15.2% | +86 bps | PASS |
| Depreciation | 3,782 | 2,893 | +30.7% | 3,640 | +3.9% | NOTE |
| Interest | 2,005 | 1,775 | +13.0% | 1,771 | +13.3% | NOTE |
| PAT after minority interest | 3,666 | 3,102 | +18.2% | 2,318 | +58.1% | PASS |
Column labels corrected by TopNews to the quarters the figures represent; see the Editor's Note.
Margins widened despite cost pressure. EBITDA margin expanded to 16.1%, up 86 basis points sequentially, even as the West Asia conflict pushed up freight, coking coal prices and forced the company to reroute deliveries. The heavier depreciation and interest lines reflect the capacity Tata Steel has been adding, yet profit after minority interest still rose 18.2% to Rs 3,666 crore. Consolidated net debt stood at Rs 91,423 crore at the end of September, about 2.4 times EBITDA.
Three furnaces, three temperatures
EBITDA per tonne tells the geographic story in one reading. India runs hot, the Netherlands is warming up after a weak first quarter, and the UK is still running cold.
Pyrometer · Q2FY27 EBITDA per tonne (Rs) · scale ±20,000, zero at centre
India (standalone) · Rs 17,420 vs Rs 18,600 in Q1FY27
Netherlands · Rs 6,077 vs Rs 279 in Q1FY27
UK · minus Rs 18,921 vs minus Rs 7,104 in Q1FY27
India cooled a little. The domestic spread slipped about Rs 1,200 a tonne on costlier coking coal and freight. Management now guides for net realisation to rise by about Rs 3,500 to Rs 3,600 a tonne in the December quarter on a higher domestic price base, partly offset by an expected coking coal increase of about $15 a tonne (roughly Rs 1,335). It also cautioned that automotive contract resets already lifted Q2 and may temper some of the Q3 and Q4 gains.
The Netherlands turned the corner. The Direct Sheet Plant restarted at rated capacity in August, lifting EBITDA from roughly Rs 40 crore to Rs 790 crore (TopNews conversion from ICICI's per-tonne data). The unit targets 65 lakh tonnes of production and about 60 lakh tonnes of deliveries in FY27, and the joint letter of intent with the Dutch government has been extended to March 2027.
The UK is waiting out an import glut. Deliveries fell to 3.8 lakh tonnes as safeguard-era imports left market inventories about 60% above normal. Management expects the stock overhang to clear and the business to break even by the March quarter, helped by EU carbon border (CBAM) restrictions and a guided realisation gain of about Rs 3,300 to Rs 3,500 a tonne in Q3.
India's coil yard: 2.74 crore tonnes and counting
With the 7.5 lakh tonne electric arc furnace at Ludhiana commissioned, India crude steel capacity reached 2.74 crore tonnes a year. Each coil below is sized by site capacity.
Jamshedpur
1.1 crore t
Kalinganagar
80 lakh t
Meramandali
56 lakh t
NINL
10 lakh t
Gamharia
10 lakh t
Ludhiana EAF
7.5 lakh t · new
The longer ambition is about 4 crore tonnes of Indian capacity, and about 70% of capex is earmarked for India. First-half capex was Rs 6,800 crore. The projects bearing the load:
NINL expansion
48 lakh t, capex about Rs 33,873 crore; on track for FY30.
Thin slab caster
25 lakh t casting and rolling facility.
Maharashtra
60 lakh t greenfield plant plus a Gadchiroli iron ore hub with Lloyds Metals & Energy.
Downstream
3 lakh t tinplate in about two years; 7.4 lakh t pickling and galvanising line under construction.
Iron ore sales add another lever: management expects 80 lakh to 1 crore tonnes in FY27, rising to 1.4 to 1.5 crore tonnes in FY28. ICICI models Indian standalone volumes compounding at about 6% from FY26 to FY29E, with standalone sales reaching 2.61 crore tonnes in FY29E; its text puts India at about 2.7 crore tonnes, a figure that appears to include NINL.
Europe recast, costs cut
In the UK, a 32 lakh tonne electric arc furnace due in 2027 is progressing as planned, with major contracts awarded. It carries a budget of about Rs 14,750 crore, of which a government grant of about Rs 5,900 crore covers roughly 40%. In the Netherlands, one blast furnace is to be replaced with a DRI-plus-EAF route by 2030, backed by up to about Rs 20,600 crore of Dutch state funding.
Ingot stack · FY27 cost-saving target Rs 7,000 crore (one ingot = Rs 1,000 crore)
Rs 1,800 crore banked in H1 (about 26%); the remaining Rs 5,200 crore is weighted to the second half.
Management says the second half should beat the first on higher volumes and a firmer price base. ICICI accordingly lifts its Indian EBITDA per tonne forecast to about Rs 18,938 in FY27E, Rs 19,100 in FY28E and Rs 18,614 in FY29E.
Forecasts reset
| Rs crore | FY26 | FY27E | FY28E | FY29E |
|---|---|---|---|---|
| Net sales | 2,30,293 | 2,75,798 | 3,03,754 | 3,22,653 |
| EBITDA | 34,352 | 46,254 (+6.5%) | 52,436 (-0.1%) | 55,884 (new) |
| EBITDA margin | 14.9% | 16.8% | 17.3% | 17.3% |
| Net profit | 10,794 | 16,758 (+9.5%) | 21,112 (-4.6%) | 23,235 (new) |
| EPS (Rs) | 8.7 | 13.4 (12.5) | 16.9 (17.7) | 18.6 |
| P/E at Rs 185 | 19.6x | 13.8x | 10.9x | 9.9x |
| RoNW | 11.2% | 14.8% | 16.7% | 16.4% |
Brackets beside FY27E and FY28E show the change from earlier estimates; grey EPS figures in brackets are the old estimates.
The near year is upgraded and FY28E is trimmed, but the three-year arc is steep: ICICI sees net sales compounding at 11.9%, EBITDA at 17.6% and net profit at 29.1% a year from FY26 to FY29E.
Rolling the valuation down to Rs 230
The target comes from a sum-of-the-parts on FY28E: Indian operations (standalone plus NINL) at 7x EV/EBITDA on Rs 48,775 crore of EBITDA, and the European business at 4x on Rs 3,391 crore. Each roll stand below reduces the slab one step.
Stand 1 · India EV
7x Rs 48,775 cr = Rs 3,41,425 cr
Stand 2 · plus Europe
+ Rs 13,562 cr = Rs 3,54,987 cr
Stand 3 · less net debt
- Rs 67,045 cr = Rs 2,87,942 cr
Finishing stand · per share
÷ 1,247 cr shares = Rs 230
Target for investors: ICICI Securities' 12-month target of Rs 230 implies 24% upside from Rs 185, comfortably above the house's 15% threshold for a BUY. At the current price the stock trades at about 10.9 times FY28E earnings and roughly 5.7 times FY28E EV/EBITDA, which the brokerage considers inexpensive for a producer with a visible volume runway. The shares sit about 17% below their 52-week high of Rs 224. In the September quarter, domestic institutions raised their holding to 27.5% while foreign investors trimmed theirs to 17.7%; promoters hold 33%.
Risks tagged for inspection
Tag 1 · Printed risk
Domestic price slump. A sharp fall in Indian steel realisation would hit the segment that drives most of the earnings.
Tag 2 · Printed risk
European regulation. Regulatory challenges in the UK and the Netherlands could weigh on performance during the furnace transition.
Tag 3 · TopNews watch
Deleveraging. The target deducts Rs 67,045 crore of net debt, against Rs 91,423 crore at September 2026, while capex for NINL, Maharashtra and the UK furnace keeps running.
Editor's Note
TopNews found these inconsistencies in the report and has not silently resolved them:
1. Quarter labels. The quarterly table heads its columns Q1FY27, Q1FY26 and Q4FY26, but the figures are Q2FY27, Q2FY26 and Q1FY27; revenue of Rs 65,436 crore and the Rs 18,600 per-tonne comparison both match the text's Q2 and Q1FY27 references. This article uses the corrected labels.
2. Indian volume. The text gives Indian sales of about 60 lakh tonnes, up 7.8%; the table shows 57 lakh tonnes, up 7.7%. This article uses the table.
3. Shifted financial statements. The P&L, cash flow, balance sheet and ratio tables are labelled FY25 to FY28E, yet their figures match FY26 to FY29E in the key financial summary (for instance, profit of Rs 10,794 crore and EPS of Rs 18.6). Total debt of Rs 84,956 crore appears as FY25 there but as FY26 in the data box.
4. FY24 return. The summary prints an FY24 RoNW of 33.0% in a year with a net loss of Rs 4,437 crore; the sign appears to be wrong.
Sources
ICICI Securities (ICICI Direct Research), Tata Steel Q2FY27 Result Update, Nov. 9, 2026; analysts Shashank Kanodia and Himalaya Arora. Tata Steel Q2FY27 earnings call commentary as reported therein.
Method: the pyrometer bars, coil sizes, ingot stack and roll-stand bridge are drawn to scale from the brokerage's own tables. Capacity and volume figures are converted to lakh and crore tonnes. Foreign-currency amounts are converted by TopNews at indicative rates of about Rs 89 per dollar, Rs 103 per euro and Rs 118 per pound; the Netherlands EBITDA in rupees is derived from ICICI's per-tonne table.
Disclaimer: This TopNews Story is based on a brokerage research report and is for information only. It is not investment advice. Investments in securities markets are subject to market risks; read all related documents carefully and consult a registered adviser before investing.
