Tata Steel witnessed a 3 per cent surge in its shares as the metal index picked up steam following China’s announcement to restructure the steel industry with output cuts. The stock closed 2.87 per cent higher on the BSE at ₹150.35 and 2.49 per cent higher on the NSE at ₹149.74. The Nifty metal index closed with a 2.34 per cent gain at 8,888.65, with major gainers including Jindal Stainless, Jindal Steel & Power, Hindustan Zinc, Welspun Corp, and JSW Steel.
Brokerages have expressed optimism about the Indian steel industry due to increasing industrial demand and strong government support for infrastructure development. HDFC Securities initiated coverage on the sector, highlighting the favorable outlook for Indian steel manufacturers, with expanding capacities and increasing value-added production. The brokerage assigned a buy rating on Tata Steel with a target price of ₹155. They emphasized Tata Steel’s Kalinganagar (TSK) Phase-2 ramp-up to drive volume growth and expand VAP sales share.
Analysts anticipate a rebound in return ratios supported by margin recovery, the growth of high-margin India operations, and the turnaround of UK operations. They project a RoCE expansion to over 13 per cent in FY27E compared to 7 per cent in FY24. A report by Anand Rathi Research suggested that JSW Steel, Tata Steel, SAIL, Jindal Steel, and ArcelorMittal Nippon Steel India are poised to capture a 67 per cent cumulative market share by FY30-31, with JSW Steel and Tata Steel expected to be among the top seven global manufacturers in terms of capacity addition.
Moreover, Tata Steel has surpassed Trent to become the fourth-largest Tata group stock with a market capitalization of ₹1.87 lakh crore. The stock has witnessed a rally of over 20 per cent from its lows in January.
Published on March 6, 2025.
