Tata Steel: Post 1Q call: India NSR/cost guidance better than expected; Europe EBITDA/t to show gradual recovery

Research evidence excerpt

Tata Steel: Post 1Q call: India NSR/cost guidance better than expected; Europe EBITDA/t to show gradual recovery

Vibhav Zutshi, CFA AC Asia Pacific Equity Research

(91-22) 6157-3585 02 August 2026 J P M O R G A N

vibhav.zutshi@jpmorgan.com

Investment Thesis, Valuation and Risks

Tata Steel (Neutral; Price Target: Rs211.00)

Investment Thesis

TATA is one of the most geographically diversified steel producers and, in our view, and is

benefitting from the improvement in steel prices across India/Europe due to safeguard

measures. While we believe Europe profitability should improve in FY27/28, Tata Steel

Netherlands faces risks of early closure of the coke and gas plants, which could have cost

implications in our view (higher raw material, freight and potential employee restructuring

costs, partially offset by lower CO2 costs). Management has also pointed to some project

delays in UK EAF (electrical infra connectivity delays) and India-NINL capacity expansion

will be completed in 2030. We believe risk/reward is balanced at current valuations.

Maintain Neutral.

Valuation

Our Sep-27 PT is Rs211. We value TATA based on our sum-of-the-parts analysis.

TATA valuation methodology

Source: J.P. Morgan estimates.

Risks to Rating and Price Target

Key upside risks to our rating and price target include: 1) higher India/Europe steel prices

due to safeguard measures and demand pickup; and 2) favorable resolution of the

Netherlands decarbonization plan and continued operations in the coke and gas plants.

Key downside risks include: 1) large-scale Chinese exports at below cash cost levels; 2) a

lack of meaningful improvement in Europe profitability due to potential cost headwinds in

the Netherlands (early closure of coke and gas plant) and delayed UK EAF restart; and 3)