Tata Steel shares gain 2% as brokerages see stronger India earnings, flag risks in Europe

• Tata Steel shares rose 2% after strong Q2 earnings.
• Consolidated net profit grew 16.2% to Rs 3,700 crore.
• Brokerages remain cautious over UK and European losses.

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Tata Steel share price: Shares of Tata Steel Ltd rose 2 percent to Rs 188.5 in morning trade on Wednesday, emerging among the top Nifty 50 gainers, as brokerages projected improving profitability in its Indian operations. However, analysts remained cautious about persistent losses in the UK and longer-term earnings risks in Europe.

UBS highlighted Tata Steel’s stronger-than-expected operating earnings and improving performance in the Netherlands. On the other hand, Nomura cut its target price despite retaining a bullish rating, citing weaker European earnings forecasts and potential risks to Tata Steel’s captive iron ore supplies.

The stock has gained 3.4 percent so far in 2026, outperforming the Nifty 50, which has declined 3 percent during the same period. Tata Steel’s market capitalisation stood at approximately Rs 2.35 lakh crore.

UBS sees stronger operating performance, but UK losses remain a concern

UBS maintained its Neutral rating on Tata Steel with a target price of Rs 220, implying approximately 19 percent upside from the previous close. The brokerage highlighted stronger-than-expected operating earnings in Q2 FY27, supported by improved steel realisations. It estimated consolidated EBITDA at Rs 10,500 crore, around 1 percent above its forecast and 6 percent higher than consensus estimates.

India production and sales volumes increased 9 percent and 8 percent year-on-year, respectively, supporting the company’s operating performance. However, profitability trends were uneven. Consolidated EBITDA per tonne improved 4 percent sequentially to Rs 13,462, while India EBITDA per tonne declined 7 percent to Rs 17,790 because of higher raw material costs.

In Europe, the Netherlands business benefited from a plant restart, with EBITDA per tonne improving to Rs 6,085. The UK business remained a weak spot, with quarterly EBITDA losses widening to Rs 720 crore from Rs 340 crore in the preceding quarter, reflecting lower volumes and narrower steel spreads.

Nomura retains Buy, but cuts target on European earnings risks

Nomura maintained its Buy rating on Tata Steel but reduced its target price to Rs 210 from Rs 240, citing lower earnings expectations for its European operations. The brokerage expects profitability in India to improve during Q3 FY27, while the Netherlands business is likely to remain EBITDA-positive.

However, Nomura lowered its consolidated EBITDA estimates for FY28 and FY29 by 7 percent each, to Rs 40,800 crore and Rs 46,100 crore, respectively, while keeping its India forecasts unchanged.

It also reduced its one-year forward EV/EBITDA valuation multiple to 7 times from 8 times, factoring in the potential loss of captive iron ore mines by FY30. Nomura said that near-term earnings also include higher iron ore sales, which are less margin-accretive than steel sales.

Tata Steel Q2 profit rises 16%, revenue grows 11%

Tata Steel on Saturday reported a 16.2 percent year-on-year increase in consolidated net profit to Rs 3,700 crore for the September quarter, compared with Rs 3,183 crore a year earlier. Consolidated revenue rose 11.5 percent to Rs 65,436 crore from Rs 58,689 crore, driven largely by Indian operations. EBITDA increased 17 percent to Rs 10,665 crore.

Steel production stood at 8.07 million tonnes, compared with 7.73 million tonnes a year earlier, while deliveries increased marginally to 7.92 million tonnes from 7.91 million tonnes.

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