Tata Steel shares extended gains for the fifth straight session on Tuesday, October 28, rising 3% to a new 52-week high of ₹182 apiece. The stock’s upward momentum remained strong, supported by positive market sentiment and optimism over improving business fundamentals.
The company’s outlook has brightened on multiple fronts, including better steel price realizations, operational improvements in its European business, robust domestic demand, and aggressive capacity expansion plans.
Improved realizations and policy support
Steel price realizations are expected to strengthen, aided by the government’s proposed 12% safeguard duty on flat steel products. This move is likely to protect domestic manufacturers and improve margins amid rising import pressure.
European business recovery
Tata Steel’s European operations are showing signs of recovery, moving toward breakeven as restructuring and cost optimization measures take effect. Lower energy costs and efficiency gains have contributed to a turnaround in performance.
Strong domestic demand outlook
India’s steel demand is projected to grow by 8–10% over FY26–27, supported by sustained infrastructure spending, policy push, and a steady revival across core industries.
Capacity expansion on track
To meet rising demand, Tata Steel is expanding its capacity from 26.5 million tonnes per annum (MTPA) in FY25 to 40 MTPA by FY30. The company expects to generate strong operating cash flow of around ₹957 billion, sufficient to fund its ongoing ₹160 billion annual expansion plans without adding significant leverage.
As of June 2025, Tata Steel’s net debt stood at ₹848 billion, including ₹141 billion in cash reserves, translating into a net debt-to-EBITDA ratio of 3.21x.
The company remains well-positioned to capitalize on the ongoing industrial upcycle in India and potential demand revival in Europe amid easing geopolitical tensions and reconstruction-led growth prospects.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers should consult financial experts before making investment decisions.
