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Tata Group firm Tata Steel Ltd.'s shares rallied five percent during the morning trade on Wednesday, May 14, as investors digested brokerage reactions following the firm's quarterly earnings show for the January-March period.
Tata Steel reported a 117 percent jump in its consolidated profit at Rs 1,200.88 crore in the quarter ending March 31, 2025, compared to Rs 554.56 crore in the same period of the previous financial year, as the company reported declines in its input costs, especially for coking coal, as well as improved sale volumes. The profit stood at Rs 295.49 crore in the third quarter of FY25.
However, despite lower material costs and sale volume improvements in both India and overseas markets, sluggish steel pricing hit the Tata Group flagship. The company’s consolidated revenue fell 4.2 percent to Rs 56,218.11 crore in the reported quarter compared to Rs 58,687.31 crore in the year-ago period, the filing said.
Going ahead, the firm has planned a capital expenditure outlay of Rs 15,000 in FY2026, with the Indian arm of the business accounting for 75 percent of the capex.
At 9.55 am, Tata Steel shares rallied to Rs 156.43 apiece, higher by 4.7 percent compared to the previous session's closing price.
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Emkay Global noted that the firm's management expects 1.5 million tonnes volume growth in FY26, mainly driven by India. The brokerage retained its 'buy' call on Tata Steel, with an unchanged target price of Rs 185.
Nuvama Institutional Equities upgraded its rating to 'buy', with a fresh target price of Rs 177 per share, up from Rs 164 earlier. The management guided for an increase in steel realisation by Rs 3,000/t QoQ along with a further decline in coking coal cost by $10/t QoQ driving EBITDA/t expansion in Q1FY26.
"We estimate Q1FY26 EBITDA/t shall increase ~Rs 2,000 QoQ due to higher prices and lower coal cost, offset marginally by softer volume. Furthermore, Europe should start delivering positive EBITDA from Q1FY26 driven by higher profitability in the Netherlands and a breakeven in UK," added Nuvama.
On the other hand, Motilal Oswal reiterated its 'neutral' rating, but cut its target price to Rs 155 per share. "Though there are near-term challenges related to price volatility due to trade tension, the long-term outlook remains strong for Tata Steel. While India business is expected to continue its strong performance, improving performance in Europe business would support overall earnings."
