Tata Steel shares: Nomura cuts target price but retains 'Buy'
Tata Steel: Nomura said near-term Ebitda would include higher iron ore sales, which are less margin-accretive than steel volumes. It also rolled forward its valuation estimates to December 2028.
- Nov 10, 2026,
- Updated Nov 10, 2026 8:39 AM IST
Nomura has retained its 'Buy' rating on Tata Steel Ltd but cut its price target on the stock to Rs 210 from Rs 240, largely on expectations of lower FY28-29 Ebitda for the European business, reflecting lower utilisation and higher costs due to project delays and the West Asia crisis. Its estimates for India remained unchanged.
Tata Steel is a global steel producer with a diversified presence across India, Europe and Southeast Asia. In India, it operates with a capacity of over 27 MTPA, supported by captive iron ore and coal assets that ensure cost leadership. Its Kalinganagar greenfield expansion strengthens its value-added and automotive steel portfolio, Nomura noted.
In the UK, Tata Steel is investing 1.25 billion pounds, with government support, to transition Port Talbot to an Electric Arc Furnace, reducing emissions by up to 85 per cent and positioning it as a green steel hub. In the Netherlands, the IJmuiden plant is shifting to hydrogen-based steelmaking under a 2 billion euros decarbonisation plan. In Southeast Asia, its Thailand operations focus on long steel production using recycled inputs, reinforcing its sustainability commitment.
Nomura said near-term Ebitda would include higher iron ore sales, which are less margin-accretive than steel volumes. It also rolled forward its valuation estimates to December 2028.
Tata Steel India management guided for Q3 realisations to rise by Rs 3,500-3,600 per tonne sequentially on auto contract resets, partly offset by a $15 per tonne increase in coking coal prices.
Nomura estimated Tata Steel's India Ebitda per tonne to rise by Rs 1,850 quarter-on-quarter (QoQ) to Rs 18,600 from Rs 16,750 in Q2.
In the UK, Tata Steel UK's Q3 realisation was guided to rise by £28-30 per tonne, but volumes of 0.38 million tonnes remain well below the 0.5-0.6 million tonne breakeven level. "We expect Ebitda per tonne loss to marginally improve from £141 per tonne to £131 per tonne in Q3."
Tata Steel Netherlands' Q3 product prices are guided to be €30 per tonne higher, but an adverse mix is expected to cut realisations by €11 per tonne sequentially.
"NINL's 4.8 mt expansion is on track for FY30E, with one rebar mill coming earlier. Iron ore sales were guided to 10 mt for FY27E (2 mt last year) and 14-15 mt for FY28E. With 48 per cent of iron ore reserves, or 75 per cent of auction-free reserves, set to be lost, monetising ore makes sense near term, but better capacity planning would have allowed more captive use, in our view," Nomura said.
"We arrive at a target price of Rs 210 by applying a slightly higher-than-mid-cycle one-year forward EV/Ebitda multiple of 7 times to new steady-state Ebitda in June 2028."
Nomura has retained its 'Buy' rating on Tata Steel Ltd but cut its price target on the stock to Rs 210 from Rs 240, largely on expectations of lower FY28-29 Ebitda for the European business, reflecting lower utilisation and higher costs due to project delays and the West Asia crisis. Its estimates for India remained unchanged.
Tata Steel is a global steel producer with a diversified presence across India, Europe and Southeast Asia. In India, it operates with a capacity of over 27 MTPA, supported by captive iron ore and coal assets that ensure cost leadership. Its Kalinganagar greenfield expansion strengthens its value-added and automotive steel portfolio, Nomura noted.
In the UK, Tata Steel is investing 1.25 billion pounds, with government support, to transition Port Talbot to an Electric Arc Furnace, reducing emissions by up to 85 per cent and positioning it as a green steel hub. In the Netherlands, the IJmuiden plant is shifting to hydrogen-based steelmaking under a 2 billion euros decarbonisation plan. In Southeast Asia, its Thailand operations focus on long steel production using recycled inputs, reinforcing its sustainability commitment.
Nomura said near-term Ebitda would include higher iron ore sales, which are less margin-accretive than steel volumes. It also rolled forward its valuation estimates to December 2028.
Tata Steel India management guided for Q3 realisations to rise by Rs 3,500-3,600 per tonne sequentially on auto contract resets, partly offset by a $15 per tonne increase in coking coal prices.
Nomura estimated Tata Steel's India Ebitda per tonne to rise by Rs 1,850 quarter-on-quarter (QoQ) to Rs 18,600 from Rs 16,750 in Q2.
In the UK, Tata Steel UK's Q3 realisation was guided to rise by £28-30 per tonne, but volumes of 0.38 million tonnes remain well below the 0.5-0.6 million tonne breakeven level. "We expect Ebitda per tonne loss to marginally improve from £141 per tonne to £131 per tonne in Q3."
Tata Steel Netherlands' Q3 product prices are guided to be €30 per tonne higher, but an adverse mix is expected to cut realisations by €11 per tonne sequentially.
"NINL's 4.8 mt expansion is on track for FY30E, with one rebar mill coming earlier. Iron ore sales were guided to 10 mt for FY27E (2 mt last year) and 14-15 mt for FY28E. With 48 per cent of iron ore reserves, or 75 per cent of auction-free reserves, set to be lost, monetising ore makes sense near term, but better capacity planning would have allowed more captive use, in our view," Nomura said.
"We arrive at a target price of Rs 210 by applying a slightly higher-than-mid-cycle one-year forward EV/Ebitda multiple of 7 times to new steady-state Ebitda in June 2028."