SBI Securities, in its Diwali pick report, set a ₹200 target for Tata Steel, implying a 17% upside over the current trading level. This move follows a 36% projected PAT CAGR for FY2026‑28, a sharp rise from the 20% PAT CAGR of FY2025‑27.
The firm forecasts a revenue CAGR of 8.3% for FY2026‑28, a moderate pace compared to the 12% sector average in the steel segment. EBITDA is expected to grow 17.6% CAGR, reflecting tighter cost control amid input pressure.
SBI Securities highlighted that favourable HRC price swings could offset rising production costs, but noted a slowdown in steel demand across India and Europe as a key risk. Regulatory and environmental scrutiny on emissions also adds uncertainty to the outlook.
On the balance sheet front, Tata Steel’s debt‑to‑equity ratio is projected to improve to 0.4x by FY2028, supporting the upside case. Analysts expect the company to hit its next earnings checkpoint on March 15, 2026, where the guidance will be closely watched.
Looking ahead, the firm sees a continued emphasis on digitalization of plant operations and a shift towards high‑grade steel products, which could sustain the projected growth trajectory and justify the premium valuation.