Tata Steel shares jump 3% after Q2 net profit soars on strong demand in key markets: Should you buy, sell or hold?

The Tata Group firm's consolidated revenue from operations rose 9 percent YoY to Rs 58,689 crore in Q2 FY26 from Rs 53,905 crore in Q2 FY25. Consolidated earnings before interest, taxes, depreciation, and amortisation (EBITDA) on a reported basis increased by more than 46 percent YoY to Rs 9,106 crore during the quarter under review.

Steel deliveries of India's second-largest maker of the alloy by market cap on a consolidated basis increased to 7.91 million tonne for the reported quarter, against 7.52 MT a year ago. Production grew slightly for the period to 7.69 MT.

Tata Steel's nearly four-fold rise in quarterly profit came as robust demand in its key markets and lower tax expenses helped limit the impact of declining prices.

Domestic demand held firm as manufacturing activity increased. Core profit at its Netherlands operations, its second largest market, stood at 92 million euros ($107 million), from 22 million euros a year ago.

Motilal Oswal on Tata Steel:

Motilal Oswal said that the revenue reported by the firm was in line with its estimate. The rise in revenue was aided by a rise in domestic deliveries, which was partly offset by a drop in realizations, it said.

The domestic brokerage noted that deliveries were in line with its estimates supported by resumed operations of Jamshedpur and NINL post maintenance shutdowns. EBITDA was slightly above its expectations.

Motilal kept a ‘Buy’ call on Tata Steel shares.

International brokerages on Tata Steel:

Morgan Stanley kept an ‘Overweight’ call on the stock, with a target price of Rs 200 per share. This implies an upside potential of nearly 12 percent from the stock’s previous closing price. Jefferies kept a ‘Buy’ call on the stock, with the same target price of Rs 200 per share.

CLSA however maintained its ‘Hold’ call, with a target price of Rs 170 per share. This implies a downside potential of nearly 5 percent from the stock’s previous closing price of Rs 178.61 apiece.

Tata Steel share price:

Earlier yesterday, Tata Steel shares closed 1.29 percent lower at Rs 178.70 apiece. The stock has gained more than 5 percent in the past one month, and nearly 22 percent in the past six months. The stock is up over 33 percent in 2025 so far.

Its P/E ratio currently stands at over 55.

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(With inputs from Reuters)

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