Tata Steel Share Price: Buy calls intact after Q3 but some see limited upside from here

Shares of Tata Steel Ltd. will react to its December quarter results, which came largely in line with Street expectations. The company's net debt has also declined.

For Q3, Tata Steel reported revenue of ₹57,002 crore, slightly below the poll estimate of ₹58,957 crore. Profit stood at ₹2,730 crore, comfortably above the Street estimate of ₹2,389 crore.

EBITDA came in at ₹8,200 crore, marginally ahead of the poll estimate of ₹7,999 crore, with margins at 14.4% compared with expectations of 13.6%.

On a per tonne basis, India EBITDA was reported at ₹13,090, marginally lower than the poll estimate of ₹13,317 per tonne. Europe continued to remain weak, though losses narrowed, with EBITDA at minus $10 per tonne versus expectations of minus $12 per tonne.

Sequentially, India EBITDA per tonne moderated from ₹14,863 in Q2FY26, while the Netherlands and UK operations also saw lower realisations, with the UK continuing to report losses.

The company's cost and efficiency initiatives remain on track. Tata Steel has outlined a targeted cost transformation programme of ₹11,500 crore across geographies, of which ₹8,600 crore has already been achieved in the nine months ended FY2026.

Tata Steel expects its Q4FY26 to benefit from higher steel prices.

What brokerages are saying

Nuvama reiterated a 'Hold' rating with a price target of ₹189, up from ₹175 earlier.

The brokerage raised its FY27E and FY28E EBITDA estimates by 5% and 7%, respectively, factoring in higher steel prices and improved profitability in the Netherlands.

Jefferies reiterated its 'Buy' rating and raised the price target to ₹240 from ₹230.

The brokerage increased FY27 to FY28 EPS estimates by 5-7% on expectations of slightly better India margins, and sees EBITDA rising 24% quarter-on-quarter in the March quarter and 30% year-on-year in FY27.

According to Jefferies, current valuations appear justified, with the stock trading at 2.2x FY27E price-to-book for an expected 19% return on equity, compared with a long-term average of 1.1x PB for 9% ROE.

Emkay also retained its 'Buy' rating, raising FY27 and FY28 EBITDA estimates by 3-8%, and increased its price target by 15% to ₹230 from ₹200.

Equirus, however, turned more cautious, downgrading the stock to 'Reduce' from Add, with a price target of ₹190.

The brokerage said most positives are already priced in and the near-term risk–reward appears unfavourable.