Buy Tata Steel; target of Rs 765: Axis Direct

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26 Aug, 2025 12:21

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Axis Direct's research report on Tata Steel

We recently visited Tata Steel’s India manufacturing units. We return positive given company’s aggressive capacity expansion plans in India. Tata Steel plans to double its crude steel capacity to 26 mnt by 2022 (through both organic and inorganic expansion). Tata Steel and ThyssenKrupp AG have signed MoU to form 50:50 JV of their European operations. The JV will have its own management team and supervisory board, enabling management to focus on India growth opportunities.

Outlook
We maintain our bullish view on Tata Steel due to its renewed focus on India business. Expansion will be value accretive, given (a) strong steel demand-supply dynamics in India and (b) lower capex cost as it is a brownfield expansion. We maintain our FY18E/19E EPS of Rs 51/ Rs 68. Maintain BUY rating with target price of Rs 765 (7x FY19E EV/EBITDA), implying 11% upside from CMP of Rs 691
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