Goldman Sachs initiates neutral on Tata Steel as positives fairly priced in

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26 Aug, 2025 12:21

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Goldman Sachs has initiated Neutral call on Tata Steel as it feels positives have been fairly priced in.

The global research house has set a target price of Rs 780 for the stock, implying a 7 percent potential upside from Tuesday's closing price.

According to the research house, Tata Steel's Phase 1 of Kalinganagar plant is expected to drive near-term volume growth.

Its India profitability is expected to be impacted by narrowing spreads, but European profitability is expected to remain stable over medium term, Goldman feels.

"We don’t take view on European JV deal materializing and estimates don't incorporate European JV," it said.

The research house expects volume/EBITDA/net profit to grow at a CAGR of 6/10/21 percent over FY17-20, and Return on equity/return on capital employed to expand to 17/8 percent by FY20 versus 10/5.7 percent in FY17.

"We could turn constructive on visibility of timely execution of expansion plan," Goldman said.

At 13:21 hours IST, the stock price of Tata Steel was up 0.81 percent at Rs 735 on the BSE.