Tata Steel Shares Gain 2% as JPMorgan Raises Price Target, Predicts 20% Upside

Shares of Tata Steel climbed 2% on March 13, ranking among the top gainers on the Nifty 50, following JPMorgan's upward revision of its target price for the stock.

The global brokerage firm raised its target price to ₹180, indicating a potential 20% upside from the previous day's closing price, while maintaining its 'overweight' rating on the stock.

As of 10:35 AM, Tata Steel share price  were trading at ₹151.88 on the NSE.

Factors Driving Tata Steel's Growth

JPMorgan highlighted several positive factors driving earnings growth for Tata Steel’s European business, noting increased investor interest following recent marketing events in Hong Kong and Singapore. However, it also pointed out that some investors have yet to fully appreciate the potential benefits of key developments, such as Germany’s infrastructure fund announcement and the substantial rise in European steel spreads.

European steel spreads have surged 18% quarter-on-quarter and over 60% on a spot basis compared to the Q3 average. JPMorgan believes these improvements are not yet factored into market expectations and anticipates that Tata Steel’s European operations will reach EBITDA breakeven by Q1 FY26.

In light of these trends, the brokerage has raised its EBITDA per tonne (EBITDA/t) estimates for Tata Steel’s European operations to $68 and $70 per tonne for FY26 and FY27, respectively—significantly higher than previous estimates of $19 and $27 per tonne. Consequently, JPMorgan has revised its overall EBITDA projections for FY26-27 upward by 8-11%.

Tata Steel’s Recent Performance and Market Outlook

Apart from the optimism surrounding its European business, Tata Steel has demonstrated resilience in the domestic market. The company continues to benefit from strong steel demand in India, supported by government-led infrastructure projects and robust industrial activity. Rising consumption from the automotive, construction, and engineering sectors has provided a steady boost to Tata Steel's sales volume.

Additionally, the Indian steel industry has been witnessing a recovery in margins, helped by stable raw material costs and higher steel prices. Tata Steel’s cost-efficiency measures and focus on sustainability initiatives, such as increasing the use of recycled steel and adopting green technologies, have also contributed to its long-term growth potential.

Analysts believe that Tata Steel’s ongoing capacity expansions and operational improvements will further strengthen its market position. The company has been making strategic investments to enhance production efficiency and improve product offerings, particularly in high-value steel segments.

Investor Sentiment and Future Prospects

Tata Steel’s strong performance has made it one of only three Tata Group stocks to have delivered positive returns this year, with a 10% gain so far. Investor confidence remains high, driven by expectations of further growth in both its Indian and European businesses.

With improving global steel demand, higher spreads, and strategic initiatives in place, Tata Steel appears well-positioned for continued growth. However, analysts caution that macroeconomic uncertainties, fluctuations in raw material costs, and geopolitical risks could impact the company’s earnings trajectory in the near term.

Despite these challenges, the overall outlook remains positive, with Tata Steel poised to capitalize on emerging opportunities in the steel sector.