- Tata Steel reported a 9% sequential rise in Q4 net profit to Rs 2,926 crore
- Revenue increased 11% QoQ to Rs 63,270 crore with EBITDA up 19.9% to Rs 9,829 crore
- EBITDA margin expanded to 15.5% from 14.4% in Q3 of FY26
Shares of Tata Steel fell over 4% today, May 18 after the company announced fourth quarter results for the fiscal year 2025-26, reporting a 9% sequential surge in net profit.
Despite Q4 profit surge, brokerages primarily shared mixed reviews about the quarterly performance and outlook, highlighting the steel maker's improved realisations and concerns over Netherlands' business.
Tata Steel shares dropped 4.41% to Rs 207.19 apiece. The scrip was trading 4.34% lower by 9:47 a.m. The benchmark NSE Nifty 50 was down 1.21%.
The tata-group steel maker posted a consolidated bottom-line of Rs 2,926 crore compared to Rs 2,689 crore in the previous quarter. Tata Steel's revenue from operations came in at Rs 63,270 crore, up 11% from Rs 57,002 in the preceding quarter.
Earnings before interest, taxes, depreciation and amortisation expenses rose 19.9% to Rs 9,829 crore from Rs 8,200 crore on a quarter-on-quarter basis. Ebidta margin expanded to 15.5% from 14.4% in the third quarter of FY26.
The steel manufacturer has also declared a final dividend of Rs 4 per share of face value Rs 1 each. The record date to determine eligible shareholders has been set as Friday, June 12, 2026.
Brokerages such as Morgan Stanley remained 'Overweight' on the stock with a target price of Rs 215, marginal downside from its current price of Rs 216.84. Citi retained 'Sell' call, while raising target price from Rs 180 to Rs 200, flagging regulatory and cost concerns in the Netherlands. Goldman Sachs mainatined 'Neutral' coverage with a target price of Rs 218. The brokerage highlighted continued uncertainty around the Netherlands operations.
CLSA stayed 'Hold' call, JP Morgan downgraded to 'Neutral' coverage citing Europe-related risks, while Jefferies remained bullish on strong India growth.
Morgan Stanley on Tata Steel
- The brokerage maintained 'Overweight' with target price of Rs 215.
- Positive Q4 results and outlook.
- Tata Steel posted strong results across both domestic and overseas businesses.
- Near-term outlook remains promising, supported by higher prices in India and policy support in the UK and the EU.
- Management are focused on cost savings and downstream expansion.
Citi on Tata Steel
- Citi retained 'Sell'; hikeed target price to Rs 200 from Rs 180.
- Q1 realizations to rise QoQ on Spot Trends.
- Further hikes unlikely.
- See potential higher costs on Netherlands regulatory issues.
Goldman Sachs on Tata Steel
- The brokerage maintained 'Neutral' call and hiked target price to Rs 218 from Rs 210.
- Q4FY26 results missed marginally.
- Realization uptick across regions dampened by uncertainty around Netherlands.
CLSA on Tata Steel
- Hold rating at target price of Rs 225
- Q4 in-line, with standalone profitability of Rs15,236 (~+Rs2,150/t QoQ) and blended profitability rising in Europe (lower losses in the UK).
- It guided for a 2mt volume uptick in FY27, but near-term profitability is likely to rise in 1QFY27 helped by a sharp price increase across geographies, partly offset by cost increases.
- However, see limited opportunities for volume growth in medium term until NINL is commissioned (FY30/31) given back-ended capacity expansion.
JP Morgan on Tata Steel
- Downgrade to Neutral at target price of Rs 220
- After a 38% rally in last one year (vs. Nifty -5.5%), downgrade with an immediate trigger from regulatory cost headwinds in Netherlands
- Netherlands faces risk of early closure of coke and gas plants, which could have cost implications (raw material/freight/potential employee restructuring, partially offset by lower CO2 costs). Management also pointed to some project delays in UK EAF (6-8 months due to electricity connectivity) and India-NINL (FID now expected in Jul-Sep)
- 1QFY27 earnings outlook is mixed: India/UK business should see margin improvement; however, Netherlands business will see margin compression due to production loss at DRI Steel Plant (emission limits exceeded)
- Lower FY28E EBITDA by 2% as the trajectory of earnings growth could be impacted due to cost pressures (regulatory uncertainty in Netherlands, Middle East conflict)
Jefferies on Tata Streel
- Buy called and raised target price to Rs 275
- Raise FY27-28E EPS by 6-14%, 20% above street.
- Mar-Q EBITDA rose 20% QoQ, 6% above JEFe
- Expect India business to deliver good 9% volume growth, along with margin expansion in FY27.
- However, TATA is yet to start next phase of capacity expansion, which limits growth visibility beyond FY27.
- European business continues to face regulatory issues, but India is key driver for stock returns.
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