Tata Steel, Hindalco, Power Grid shares upgraded to 'Buy'; brokerage raises target prices

Nuvama Institutional Equities has recently upgraded Tata Steel Ltd, Hindalco Industries Ltd and Power Grid Corporation of India Ltd (PGCIL) to 'BUY', while raising their respective 12-month target prices following their Q2 FY27 earnings.

Tata Steel

Nuvama raised its target price to Rs 219 from Rs 209 and upgraded the stock to 'BUY'.

Tata Steel reported standalone EBITDA of Rs 10,320 crore in Q2 FY27, up 9.6 per cent sequentially and marginally above Nuvama's estimate of Rs 9,900 crore. Higher volumes offset lower steel prices and increased cost of production (CoP).

"Q3 FY27 India EBITDA/t shall increase by ~Rs 2,400/t QoQ amid higher prices. Benefits of higher prices and volume are expected to accrue to European operations from Q4 FY27," the domestic brokerage said.

It raised its FY27 and FY28 EBITDA estimates by 2 per cent and 9 per cent, respectively, factoring in higher prices and iron ore sales. The stock trades at 5.7 times estimated FY28 EV/EBITDA.

Hindalco Industries

Nuvama also upgraded Hindalco to 'BUY' and raised its target price to Rs 1,184 from Rs 1,108.

Hindalco India, including Utkal Alumina, reported Q2 FY27 EBITDA of Rs 8,450 crore, beating the brokerage's estimate of Rs 7,080 crore. Higher aluminium volumes, value addition and sulphuric acid prices supported the performance.

"Hindalco hedged 26 per cent of FY28E volume at $3,168/t, restricting earnings downside in case of any fall in aluminium price (FY28E/29E LME aluminium of $3,000/2,700/t)," Nuvama said.

The brokerage expects Novelis' earnings and cash flow to improve from Q4 FY27 onwards. It raised FY27 and FY28 EBITDA estimates by 4-5 per cent, factoring in higher copper profits. The stock trades at 5.6 times estimated FY28 EV/EBITDA.

PGCIL

Nuvama increased its target price to Rs 300 from Rs 283 and upgraded PGCIL to 'BUY' as well.

The company's Q2 consolidated PAT rose 8.4 per cent year-on-year (YoY) to Rs 3,870 crore, supported by higher other income and a lower tax rate. Revenue and EBITDA grew 3 per cent and 7 per cent, respectively, despite a 12 per cent rise in gross assets.

Nuvama estimated Q2 core RoE at 14.3 per cent. It also highlighted the stock's 19 per cent correction since May 2026.

The brokerage introduced FY29 estimates, implying a 6.5 per cent EPS CAGR and 14-15 per cent core RoE over FY26-FY29.