Tata Steel’s share price may appear sluggish right now, but many market experts still see significant potential ahead. Brokerage firms are positive on the company and believe it can perform well in the future, especially given its solid business model and strong presence in the steel sector.
A recent report by Antique Stock Broking suggests that steel companies with strong control over raw materials and low debt levels are better positioned for growth. Tata Steel fits this category well because it has a stable base in the domestic market and a well-integrated business structure. This helps the company manage costs effectively and remain competitive even when market conditions are not very strong.
The company’s product mix also plays a key role, as approximately 75% of its portfolio consists of flat steel products, which are widely used in industries such as automobiles and construction. Additionally, Tata Steel is expanding its production capacity through its 5 MTPA Kalinganagar plant and 2.2 MTPA cold rolling mill project.
Currently, Tata Steel shares are trading around ₹198. Brokerage firms have assigned a target price of ₹235, indicating upside potential from current levels. Previously, on May 15, the stock touched a 52-week high of ₹224.40, while its 52-week low is ₹149.70. These numbers indicate that the stock has already shown strong movement over the past year.
The company has taken several steps to reduce its operating costs, which could improve its EBITDA margin in the future. However, rising coking coal prices may put some pressure on profits and reduce the overall benefits of these cost-cutting efforts.
Tata Steel is also working on a major £1.25 billion low-carbon steel project in the United Kingdom. This project is expected to reduce carbon emissions by approximately 90%, equivalent to approximately 5 million tons per year. However, difficulties obtaining a power connection may delay the timeline by 6 to 8 months.
The company is installing a 3.2 million tonne electric arc furnace at its Port Talbot plant, replacing the old blast furnace. The UK government is supporting this project with £500 million. Despite the delay, Tata Steel is working closely with authorities to minimize its impact.
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