Tata Steel Gets Motilal Oswal's 'Buy' Upgrade, Sees 19% Upside — Check Target Price

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Motilal Oswal Report

Tata Steel Ltd. is one of the largest players in India's steel sector and is set to benefit from improving steel price realizations, operating efficiencies, and the strong domestic demand outlook. The implementation of the safeguard duty is expected to help domestic operations achieve better realization.

While near-term challenges persist due to global uncertainty around tariff escalations, the long-term outlook for Tata Steel remains strong. The Indian business is expected to continue its strong performance, and an improvement in the European business performance is likely to support overall earnings.

Tata Steel is expected to generate a strong operating cash flow of Rs 957 billion, which will help fund the ongoing/planned expansion of Rs 160 billion annually without leveraging the balance sheet.

Net debt stood at Rs 848 billion as of Q1 FY26, which includes cash of Rs 141 billion. This translates into net debt/Ebitda of 3.21x as of Jun’25.

At current market price, Tata Steel is trading at 6.8x EV/Ebitda and 1.9x FY27E price/book.

We upgrade the stock from Neutral to BUY with an SOTP-based target price of Rs 210 per share on Sep’27 estimate.

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