Buy Tata Steel; target of Rs 612: Firstcall Research

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26 Aug, 2025 12:21

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Firstcall Research report on Tata Steel“Tata Steel Limited was Established in 1907 as Asia's first integrated private sector steel company, Tata Steel Group is among the top-ten global steel companies with an annual crude steel capacity of over 29 million tonnes per annum (mtpa). It is now the world's second-most geographically-diversified steel producer, with operations in 26 countries and a commercial presence in over 50 countries. The Group’s vision is to be the world’s steel industry benchmark through the excellence of its people, its innovative approach and overall conduct. Underpinning this vision is a performance culture committed to aspiration targets, safety and social responsibility, continuous improvement, openness and transparency.”“The Tata Steel group saw production of 27.37 million tonnes of steel in the Financial Year 2013-14. The first phase of the greenfield steel project at Kalinganagar which boasts of a Blast Furnace of 4330 cum capacity that will roll out high end flat products, is currently under implementation. The new facilities of the 2.9 million tonnes per annum brown field expansion at Jamshedpur reached their full capacity in the second half of Financial Year 2013-14 which helped register the best-ever performance in Hot Metal, Crude Steel, Saleable Steel production and total sales. Segments like LPG witnessed three times market share increase from 7% in Financial Year 2012-13 to 23% in Financial Year 2013-14. In 2008, Tata Steel India became the first integrated steel plant in the world, outside Japan, to be awarded the Deming Application Prize 2008 for excellence in Total Quality Management. In 2012, Tata Steel became the first integrated steel company in the world to win the Deming Grand Prize 2012 instituted by the Japanese Union of Scientists and Engineers. Tata Steel’s larger production facilities include those in India, the UK, the Netherlands, Thailand, Singapore, China and Australia. Operating companies within the Group include Tata Steel Limited (India), Tata Steel Europe Limited (formerly Corus), NatSteel, and Tata Steel Thailand (formerly Millennium Steel).” “At the current market price of Rs. 541.30, the stock P/E ratio is at 6.67 x FY15E and 6.18 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.81.13 and Rs.87.54 respectively. Net Sales and PAT of the company is expected to grow at a CAGR of 10% and 19% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 1.55 x for FY15E and 1.39 x for FY16E. Price to Book Value of the stock is expected to be at 0.78 x and 0.72 x respectively for FY15E and FY16E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.612.00 for Medium to Long term investment,” says Firstcall Research report.  

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