The foreign brokerage sees positive catalysts driving earnings growth for Tata’s Europe business. Investor interest in Tata Steel’s stock has been rising, as observed during ongoing marketing events in Hong Kong and Singapore.
However, JPMorgan believes that some investors have yet to fully appreciate the potential positive impact of recent developments, such as Germany’s infrastructure fund announcement and the sharp increase 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 suggests that these improvements are not yet factored into consensus estimates and expects Tata Steel’s European business to reach EBITDA breakeven by Q1 of FY26.
In response to these favorable trends, the brokerage has increased its EBITDA per tonne (EBITDA/t) assumptions for Tata Steel’s European segment in FY26-27 to $68 and $70 per tonne, respectively, a significant rise from its previous estimates of $19 and $27 per tonne. Subsequently, JPMorgan has also upgraded its overall EBITDA projections for FY26-27 by 8-11%.
As many as 35 analysts who have coverage on Tata Steel, out of which 21 of them have a ‘Buy’ rating, while eight have a ‘Hold’ rating and six say ‘Sell’.
As of Wednesday (March 12), Tata Steel commands a market capitalisation of nearly ₹1.88 lakh crore. With a market capitalisation of about ₹2 lakh crore, Tata Steel now represents 6.9% of the Tata Group’s combined market capitalisation.
Tata Steel is also the only third Tata Group stock that has delivered positive returns this year. The other two are Benares Hotels and Tata Consumer Products. While Benares Hotels has been the top performer this year with a stellar rally of 47%, Tata Consumer Products has gained over 4% during the same period.
Shares of Tata Steel Ltd. 0.31% lower on Wednesday at ₹150.28. The stock is up 10% so far in 2025.