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

Tata Steel and ThyssenKrupp AG have signed MOU to form 50:50 joint venture of their European operations. Tata Steel expects commencement of JV by March 2019, post clearance of various regulatory approvals.

Outlook

The JV is Positive for Tata Steel as the company can now focus on Indian growth opportunity. Tata Steel would now likely look to expand Kalinganagar (Odisha) capacity. Expansion would be value accretive, given (a) strong steel demand/supply dynamics in India and (b) lower capex cost being a brownfield expansion. While we await details about complete financial arrangements, we raise our target EV/EBITDA multiple for Tata Steel Europe by 1x and maintain BUY rating on the stock with revised target price of Rs 765 (Rs 690 earlier).

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