Buy TATA Steel; target of Rs 240: Motilal Oswal

Motilal Oswal is bullish on TATA Steel recommended buy rating on the stock with a target price of Rs 240 in its research report dated February 18, 2026.

Broker Research

February 19, 2026 / 11:04 IST

buy

Motilal Oswal's research report on TATA Steel

India's steel demand is projected to grow by ~8-10% over FY26-30, backed by a robust demand environment, policy support, and ongoing recovery in industry fundamentals. TATA is aggressively expanding its capacity in India to capitalize on rising domestic demand, scaling from 26.5mtpa in FY25 to 40mtpa by FY31 over the medium term, with an annual capex commitment of ~INR160b. Recently, TATA commissioned 5mtpa integrated capacity at Kalinganagar, increasing the plant’s total capacity to 8mtpa (INR270b investment), with phase-III expansion targeting 13mtpa. Other key projects include scaling NINL from 1mtpa to 5.8mtpa. The board has approved the expansion under Phase-I of its long-term plan with expected timeline of 3-3.5 years. Ongoing commissioning of 0.75mtpa scrapbased EAF in Ludhiana by FY27 will focus on high-margin retail products. The board has approved establishing a ~1mtpa demonstration plant in Jamshedpur, based on Hisarna low-carbon technology. TATA is transitioning into green steelmaking in Europe, where it is converting Port Talbot (UK) to a 3mtpa EAF from conventional BF route steelmaking. The company is also exploring a gas-based DRI + EAF route at IJmuiden (the Netherlands), subject to policy clarity.

Outlook

At CMP, TATA is trading at 7.7x EV/EBITDA and 2.3x FY27E P/B. We maintain our BUY rating with an SoTP-based TP of INR240 per share on Sep’27 estimate.

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