Tata Steel (TATA IN) – Management Meet Update – Need to fast track capacity addition pace – Accumulate
Published on 29 Sep 2025
We expect Tata to face capacity constraints post-FY28 if the pace of execution does not improve, particularly when robust domestic consumption rate continues. There remains an upside risk to our EBITDA/t assumptions, as the safeguard duty has effectively set a floor for domestic pricing, and improving demand would lead to higher prices in domestic parlance which is at ~6% discount to import parity prices. On the downside, demand uncertainty in developed markets and continued China supplies remains a risk for TSE performance. The stock currently trades at 6.2x/5.6x FY27/28E EBITDA. We maintain Accumulate rating with a revised target price of 181 (earlier 177), valuing the company at 6.5x EV/Sep’27E EBITDA (rolling forward from Mar’27).
