Tata Steel (TATA IN) – Event Update – Growth capex for India, but need to expediate – Accumulate
Published on 12 Dec 2025
Management expects NINL to be commissioned in 3-4 years, while it will incrementally focus on higher-margin downstream finished steel products in the interim. Mgmt. also reiterated that current global steel prices are unsustainable and expect it to improve gradually. We expect fast tracking of NINL capex to maintain market share in fast growing domestic market as TATA would struggle for capacities post FY28E. All the growth projects (ex-MH est ~Rs450-500bn as per our caln) would aid volume growth only from FY29E. Existing 26.6mtpa Indian capacities and upcoming 0.8mtpa Ludhiana EAF would facilitate volume growth till FY28E. We cut our estimates by 2-3% on account of current weakness in steel pricing. At CMP, the stock is trading at 6.4x/5.8x EV of FY27/28E EBITDA. We maintain ‘Accumulate’ rating with revised TP of Rs188 (Rs196 earlier) valuing at 7x EV of Sep’27E TSI EBITDA.
