Prabhudas Lilladher has issued an 'Accumulate' rating on Tata Steel with a target price of ₹212 in its research report dated August 01, 2026. According to the brokerage's analysis, the stock is currently trading at 6.8x/6.6x EV of FY27/28E EBITDA. The revised target price of ₹212 represents a reduction from the earlier target of ₹226, with the stock valued at 7.5x EV/TSI EBITDA and 5x TSE EBITDA.
Tata Steel delivered an in-line Q1FY27 performance with continued robust India operating performance aided by higher steel pricing. As reported by Prabhudas Lilladher, volumes grew 9% YoY due to planned maintenance shutdowns at Meramandali and KPO facilities. A sharp recovery in domestic steel prices drove NSR higher, offsetting the impact of higher coking coal costs. The company delivered EBITDA/t of ₹17.8k during the quarter.
Europe operations showed mixed results during the quarter. According to Prabhudas Lilladher's analysis, Tata Steel UK (TSUK) continued to improve with losses narrowing on better pricing and restructuring benefits. However, Tata Steel Netherlands (TSN) remained weak due to the temporary shutdown of the 1.4mtpa Direct Sheet Plant (DSP). The temporary restart of DSP from August 5, 2026 provides some relief for TSN, with management expecting the emission issue to be largely addressed, though this consent remains subject to regulatory assessment after the trial period.
Looking ahead, TSUK remains on track to achieve EBITDA breakeven in H2FY27, supported by improving steel spreads. In India, NSR is expected to moderate in Q2 by ₹1,500/t while coking coal costs are likely to move higher by $5/t before easing in H2FY27. As reported by Prabhudas Lilladher, the brokerage maintains its positive outlook on the steel major despite the challenging near-term cost environment.
