- Jefferies stays bullish on select Tata Group firms despite N Chandrasekaran stepping down
- Indian Hotels is Jefferies' top Tata pick with a 'buy' rating and Rs 875 price target
- Tata Steel retains 'buy' rating with Rs 240 target, benefiting from potential steel price recovery
Jefferies has reiterated a bullish stance on select Tata Group companies, even as N Chandrasekaran prepares to step down as chairman of Tata Sons, the group's principal holding company.
Chandrasekaran announced that he will not seek another term after his current tenure ends in February 2027. Jefferies said that while the development has stirred near-term market concerns, it expects the group's underlying business fundamentals to hold up. "Looking through the potential near-term market concerns related to leadership change, we believe business fundamentals will prevail," the brokerage said in a note.
Indian Hotels (IHCL) remains Jefferies' top pick among Tata Group stocks, with a 'buy' rating and price target of Rs 875, implying 21% upside. The brokerage cited healthy domestic RevPAR growth, accelerating asset-light key additions and rapid scaling of newer businesses as key growth drivers, with domestic travel tailwinds offsetting weakness in outbound travel. Jefferies values IHCL at 28 times September 2028 EBITDA, factoring in a 15% EBITDA CAGR over FY26-29.
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Tata Steel also retained its 'buy' rating, with a target price of Rs 240, implying 29% upside. Jefferies said the company is a key beneficiary of a potential recovery in Indian steel prices, with Asian conversion spreads still about 20% below their long-term average and room to expand. The brokerage flagged that Tata Steel's next major capacity expansion will only begin in FY31, which could limit volume growth beyond FY27. The stock trades at 6.7 times FY27 EV/EBITDA against a 10-year average of 6.4 times, which Jefferies called reasonable.
Jefferies expectation of IHCL, Tata Steel and TCS target price
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On the other hand, Jefferies retained its cautious 'underperform' call on TCS, with a price target of Rs 1,800 — the brokerage's third cut to its target for the stock this year. Jefferies flagged higher exposure to application-managed services and business process outsourcing as leaving TCS more vulnerable to AI-led revenue deflation, along with a flat order book and declining headcount weighing on growth visibility. The brokerage expects TCS to post a muted 3.9% revenue CAGR over FY26-29.
Tata Sons is the primary promoter holding company for the Tata Group, India's largest conglomerate with a history spanning more than 150 years. Tata Trusts holds a 66% stake in the company, followed by the Shapoorji Pallonji Group at 18% and Tata Group companies at 13%.
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