Tata Steel shares: MOFSL maintains 'Buy' rating, sees 15% potential upside
Tata Steel: MOFSL said India's steel demand is projected to grow at 8-10 per cent over FY26-30, backed by a robust demand environment, policy support, and ongoing recovery in industry fundamentals.
- Feb 19, 2026,
- Updated Feb 19, 2026 8:56 AM IST
MOFSL in a fresh note said Tata Steel Ltd stock has performed well since it upgraded the Tata group stock to 'Buy' in October 2025. The brokerage said it has retained its constructive view on the stock on the back of a strong domestic demand outlook, safeguard duty-led price support, ongoing capacity expansions and a gradual turnaround in the EU business.
While near-term European profitability remains contingent on spread recovery and energy costs, MOFSL said structural measures such as CBAM and tighter import quotas should gradually improve pricing discipline and reduce import-led margin pressure. India business, it said, is expected to continue its strong performance, and an improvement in the EU performance to support overall earnings.
MOFSL said Tata Steel's net debt stood at Rs 81,800 crore as of Q3, when included cash levels of Rs 10,800 crore. This translates into a net debt-to-Ebitda ratio of 2.59 times.
"At CMP, Tata Steel is trading at 7.7 times EV/Ebitda and 2.3 times FY27E P/BV. We maintain our Buy rating with an SoTP-based target of Rs 240 per share on September 2027 estimates," MOFSL said. The target suggetss 15 per cent potential upside over Tata Steel's prevailing market price.
MOFSL said India's steel demand is projected to grow at 8-10 per cent over FY26-30, backed by a robust demand environment, policy support, and ongoing recovery in industry fundamentals. It said the steelmaker is aggressively expanding its capacity in India to capitalise on rising domestic demand, scaling from 26.5mtpa in FY25 to 40mtpa by FY31 over the medium term, with an annual capex commitment of Rs 16,000 crore.
Recently, Tata Steel commissioned 5mtpa integrated capacity at Kalinganagar, increasing the plant’s total capacity to 8mtpa, with phase-III expansion targeting 13mtpa.
Other key projects include scaling NINL from 1mtpa to 5.8mtpa. The board has approved the expansion under Phase-I of its long-term plan with expected timeline of 3-3.5 years. Ongoing commissioning of 0.75mtpa scrap-based EAF in Ludhiana by FY27 will focus on high-margin retail products, MOFSL noted.
"The board has approved establishing a 1mtpa demonstration plant in Jamshedpur, based on Hisarna low-carbon technology," MOFSL added.
MOFSL in a fresh note said Tata Steel Ltd stock has performed well since it upgraded the Tata group stock to 'Buy' in October 2025. The brokerage said it has retained its constructive view on the stock on the back of a strong domestic demand outlook, safeguard duty-led price support, ongoing capacity expansions and a gradual turnaround in the EU business.
While near-term European profitability remains contingent on spread recovery and energy costs, MOFSL said structural measures such as CBAM and tighter import quotas should gradually improve pricing discipline and reduce import-led margin pressure. India business, it said, is expected to continue its strong performance, and an improvement in the EU performance to support overall earnings.
MOFSL said Tata Steel's net debt stood at Rs 81,800 crore as of Q3, when included cash levels of Rs 10,800 crore. This translates into a net debt-to-Ebitda ratio of 2.59 times.
"At CMP, Tata Steel is trading at 7.7 times EV/Ebitda and 2.3 times FY27E P/BV. We maintain our Buy rating with an SoTP-based target of Rs 240 per share on September 2027 estimates," MOFSL said. The target suggetss 15 per cent potential upside over Tata Steel's prevailing market price.
MOFSL said India's steel demand is projected to grow at 8-10 per cent over FY26-30, backed by a robust demand environment, policy support, and ongoing recovery in industry fundamentals. It said the steelmaker is aggressively expanding its capacity in India to capitalise on rising domestic demand, scaling from 26.5mtpa in FY25 to 40mtpa by FY31 over the medium term, with an annual capex commitment of Rs 16,000 crore.
Recently, Tata Steel commissioned 5mtpa integrated capacity at Kalinganagar, increasing the plant’s total capacity to 8mtpa, with phase-III expansion targeting 13mtpa.
Other key projects include scaling NINL from 1mtpa to 5.8mtpa. The board has approved the expansion under Phase-I of its long-term plan with expected timeline of 3-3.5 years. Ongoing commissioning of 0.75mtpa scrap-based EAF in Ludhiana by FY27 will focus on high-margin retail products, MOFSL noted.
"The board has approved establishing a 1mtpa demonstration plant in Jamshedpur, based on Hisarna low-carbon technology," MOFSL added.