Tata Steel (TATA IN) – Q3FY26 Result Update – TSI to remain strong; EU/UK safeguards to aid – Accumulate
Published on 07 Feb 2026
Key things to watch out for: a) spot spread movement along with coking coal, b) measures taken by UK govt for safeguarding steel industry, c) ramping up of Ludhiana EAF and finishing mills, d) EC and commencement of NINL/ HIsarna expansion as H2FY28 can face capacity constraint, e) development on CBAM & prices. We cut our EBITDA estimates by 4%/1% on higher coking coal assumption and lower TSUK EBITDA and expect EBITDA CAGR of 24% over FY25-28E on the back of strong domestic pricing. At CMP, the stock is trading at 7.3x/6.4x EV of FY27/28E EBITDA. We roll forward to Mar’28 and maintain ‘Accumulate’ rating with revised TP of Rs226 valuing at higher 7.5x EV/TSI EBITDA multiple as TSI would benefit on higher prices along with strong domestic demand, structural cost transformation initiatives and higher European prices would aid faster TSE breakeven. Accumulate.
