ICICI Securities has reiterated a BUY rating on Tata Steel with a 12-month target price of Rs 210 per share, implying an upside potential of about 24 percent from the current market price of Rs 170. The brokerage’s constructive stance is anchored in Tata Steel’s ambitious roadmap to scale its Indian steelmaking capacity to 40 million tonnes per annum (MTPA) by 2030, a deepening downstream portfolio, and enhanced raw material integration, even as high capital expenditure (capex) temporarily elevates balance sheet leverage. Investors are being asked to look through near-term earnings volatility and capex intensity, and instead focus on structurally improving margins, rising return ratios, and stronger cash generation across the Indian franchise as expansions ramp up and European operations gradually stabilize.​

ICICI Securities’ Investment Call

Recommendation and target
ICICI Securities’ retail research arm maintains a BUY call on Tata Steel with a sum-of-the-parts-based target price of Rs 210 per share, against a prevailing market price of Rs 170, implying an upside of roughly 24 percent over a 12-month horizon. The valuation embeds an 8.5 times EV/EBITDA multiple for the Indian operations and 4 times EV/EBITDA for the European business on average FY27–FY28 estimates, reflecting the structurally superior profitability and growth visibility of the India franchise.​

Time frame and investment stance
The performance horizon for this recommendation is one year, with the upside case predicated on timely execution of planned capacity additions, gradual improvement in global steel spreads, and disciplined capital allocation. While elevated capex weighs on interim leverage, the brokerage argues that improving EBITDA and cash flows, particularly from India, should support a steady deleveraging trajectory beyond the investment phase.​

Stock Levels and Trading Benchmarks

Current market context
Tata Steel’s current market capitalization stands at about Rs 2.12 lakh crore, underpinned by an enterprise value of roughly Rs 2.89 lakh crore as of FY25, with total debt of nearly Rs 88,964 crore and cash and investments of Rs 12,090 crore. The stock has traded in a 52-week range of Rs 123 to Rs 187, placing the latest quoted level of Rs 170 closer to the upper half of its recent band.​

Investor levels and risk-reward zones
From a trading and investment perspective, ICICI Securities’ fair value of Rs 210 effectively becomes the primary upside reference level, while the recent low near Rs 123 offers a broad downside marker for long-term investors assessing risk-reward. On FY27–FY28 earnings, the stock is valued at a forward price-to-earnings multiple in the low to mid-teens and an EV/EBITDA multiple trending down from 8.6 times in FY26 to 6.4 times by FY28, underscoring a de-rating in enterprise value as earnings expand.​

Strategic Capacity Expansion Roadmap

Road to 40 MTPA in India
Tata Steel has laid out a multi-pronged expansion strategy aimed at scaling its Indian capacity to 40 MTPA by 2030, leveraging greenfield builds, brownfield expansions, and strategic partnerships. The company currently commands 26.6 million tonnes of crude steel capacity in India, supplemented by 7 million tonnes in the Netherlands, 3.2 million tonnes in the United Kingdom (upcoming configuration), and 1.7 million tonnes in Thailand, giving it a geographically diversified production base.​

NINL phase-1 expansion
Board approval has been secured for a 4.8 MTPA Phase-1 expansion at Neelachal Ispat Nigam Ltd (NINL), focussed largely on the long products segment through a 2 MTPA rebar mill, a 0.5 MTPA coil mill, and a high-end wire rod mill. This project is slated to be executed over four years, with final capex contours to be firmed up by March 2026, and management eventually targets scaling NINL to a 10 MTPA complex in the longer term.​

Key Projects, Partnerships and Integration

Greenfield Maharashtra facility and Lloyd Metals MoU
Tata Steel has signed a memorandum of understanding with Lloyd Metals and Energy to collaborate across iron ore mining, slurry pipelines, pellet production, and steelmaking, strengthening raw material security and logistics. Parallelly, the company plans to set up a 6 MTPA greenfield steelmaking facility in Maharashtra in two phases, with project timelines and capex currently under active discussion, marking a critical pillar of the 40 MTPA roadmap.​

Thriveni Pellets acquisition and cost savings
The acquisition of a 50 percent equity stake in Thriveni Pellets Pvt Ltd for Rs 636 crore values the entity at about Rs 1,272 crore, or roughly 0.9 times book value. With a 4 MTPA pellet plant and a 212-kilometre slurry pipeline located near Tata Steel’s Kalinganagar and NINL plants, the asset is expected to drive cost savings of around Rs 60 crore per month, implying a payback period of roughly one year.​

Downstream Strength and Technology Edge

Downstream expansions in flat products
On the downstream front, Tata Steel is erecting a 2.5 MTPA Thin Slab Caster and Rolling facility at Meramandali, which will be integrated with a blast furnace relining programme and is projected to add 2.5 MTPA of upstream capacity by FY29. In Tarapur, Maharashtra, the company plans to commission a 0.7 MTPA hot-rolled pickling and galvanizing line within the existing cold rolling complex, sharpening its exposure to premium automotive-grade steel.​

HIsarna demonstration plant
The company also intends to build a 1 MTPA demonstration plant based on HIsarna technology, which allows the use of lower-grade iron ore without coking coal to produce steel, with an estimated capex outlay of Rs 2,500–3,000 crore. This initiative, beyond offering potential cost and environmental benefits, positions Tata Steel on the front line of decarbonisation and process innovation in global steelmaking.​

Financial Performance and Outlook

Revenue, margins and earnings trajectory
Consolidated net sales stood at Rs 2,16,840 crore in FY25 and are projected to rise to Rs 2,63,052 crore by FY28, implying a three-year compound annual growth rate of 6.7 percent from FY25 to FY28. EBITDA is expected to climb from Rs 25,298 crore in FY25 to Rs 44,719 crore in FY28, pushing EBITDA margins up from 11.7 percent to 17 percent, while net profit is forecast to expand from Rs 3,421 crore to Rs 18,441 crore over the same period, translating to a robust earnings CAGR.​

Return ratios and leverage metrics
Return on equity is projected to improve from 4.1 percent in FY25 to 15.5 percent in FY28, while return on capital employed is forecast to rise from 7.2 percent to 13.8 percent, signalling better capital efficiency as projects start contributing. Debt-to-EBITDA is estimated to decline from 3.5 times in FY25 to 1.9 times by FY28, and the debt-to-equity ratio is expected to ease from 1.0 to 0.7, underscoring a gradual strengthening of the balance sheet.​

Regional Operations and Assumptions

India operations – volume and profitability
Indian operations (standalone plus NINL) are projected to see sales volumes rise from 20.9 million tonnes in FY25 to 24 million tonnes by FY28, with blended realisations moving from about Rs 66,007 per tonne to Rs 66,856 per tonne. EBITDA per tonne is forecast to increase from Rs 13,817 to Rs 16,651 over the same period, reinforcing India’s role as the primary earnings engine for the group.​

Europe – Netherlands and UK trends
In the Netherlands, sales volumes are expected to grow modestly from 6.3 million tonnes in FY25 to 6.6 million tonnes in FY28, with EBITDA per tonne strengthening from Rs 1,310 to Rs 7,000, reflecting an improving operating environment. The UK operations, by contrast, are projected to remain loss-making on EBITDA through most of the forecast period, but the quantum of losses per tonne is expected to narrow sharply from a negative Rs 16,542 in FY25 to a marginal negative Rs 962 by FY28.​

Valuation, Risks and Investor Takeaways

SoTP valuation and implied market cap
On an average FY27–FY28 basis, Tata Steel’s Indian operations are expected to generate EBITDA of about Rs 38,317 crore, which, capitalised at 8.5 times EV/EBITDA, yields a target enterprise value of Rs 3,25,692 crore. European operations, with projected EBITDA of Rs 3,297 crore and a 4 times multiple, contribute a further Rs 13,189 crore, taking the consolidated target enterprise value to roughly Rs 3,38,881 crore; adjusting for net debt of Rs 72,812 crore produces an implied equity value of Rs 2,66,069 crore and a per-share target of Rs 210 based on 1,247 crore shares.​

Key risks and what to watch
The principal risks flagged include a prolonged delay in global steel price recovery, which could weigh on profitability across both Indian and European operations, and the possibility that high capex intensity could drive leverage higher than anticipated in the interim phase. For investors, the story hinges on execution of the 40 MTPA roadmap, realisation of cost efficiencies from integration and technology, and disciplined balance sheet management, all of which will determine whether the current valuation leaves meaningful room for long-term upside.