Tata Steel Shares Scale New Peak on Robust Quarterly Performance
Tata Steel's share price witnessed a significant surge, climbing another 4.5% during the intraday session on February 10, to reach a fresh all-time high of ₹211 per share. This upward movement marks the second consecutive session of gains, following a 2.5% rise in the previous trading day after the company unveiled its December quarter results. Investor sentiment remains overwhelmingly positive, fueled by the steel giant's performance that exceeded market expectations for Q3FY26.
Analysts Revise Targets Upward on Improved Outlook
The financial results not only delighted market participants but also prompted analysts to revise their target prices for the stock, thereby sustaining the bullish momentum. Expectations of a turnaround in Tata Steel's European operations over the coming quarters, supported by ongoing cost reduction initiatives, have led analysts to increase their valuation multiples. While near-term uncertainties persist due to price volatility from trade barriers such as the Carbon Border Adjustment Mechanism (CBAM), tariffs, and import quota reductions, the long-term outlook for Tata Steel remains favorable according to industry experts.
Domestic brokerage firm Motilal Oswal highlighted that Tata Steel delivered a decent performance in Q3FY26 as anticipated, primarily driven by healthy volumes, though partially offset by muted net sales realization in India. The brokerage anticipates an improvement in EBITDA performance from the European segment in subsequent quarters, owing to cost-restructuring measures. Additionally, capacity ramp-up in the Netherlands and lower fixed costs are expected to bolster overall EBITDA going forward.
Consequently, Motilal Oswal raised its FY26E earnings estimates, increasing EBITDA by over 2% and profit after tax by over 3%, driven by a better volume and net sales realization outlook. The brokerage also marginally lifted its FY27E EBITDA by 2% to reflect improved pricing and cost projections. Maintaining a 'Buy' rating, Motilal Oswal set a target price of ₹240 per share.
Brokerages Boost Estimates on Structural Shifts
Axis Securities also adjusted its valuation multiple for Europe from 4x to 6x, citing a structural shift in Europe's steel landscape due to CBAM and potential tariff hikes, which could drive higher steel prices for the company. Amid these developments, the brokerage elevated its FY27 and FY28 EBITDA estimates, factoring in slightly higher steel HRC prices and improved downstream premiums. As a result, Axis Securities raised its Tata Steel share price target to ₹220 from an earlier target of ₹195 per share, while retaining a 'Buy' rating.
Another brokerage, JM Financial, revised its earnings estimates upward for FY27 and FY28 by 12–13% and increased its fair value to ₹240 per share to account for an improved steel price outlook across regions. JM Financial maintained its 'Buy' rating on the stock, reinforcing the positive sentiment.
Q3FY26 Financial Highlights
Tata Steel reported a consolidated net profit that jumped manifold to ₹2,731 crore in the December quarter, supported by higher revenues, which rose to ₹57,504 crore from ₹53,870 crore in the year-ago period. Breaking down the revenue figures, Tata Steel India and Neelachal Ispat Nigam contributed ₹37,142 crore, up from ₹34,219 crore in Q3FY25. Meanwhile, Tata Steel UK registered revenue of ₹5,536 crore, a slight decrease from ₹5,665 crore in the October–December FY25 quarter.
Disclaimer: This article is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking companies and do not represent financial advice. Investors are advised to consult with certified experts before making any investment decisions.
