Tata Steel Limited

Basic Materials — Steel · NSE

₹175.50−₹0.90 (−0.51%)

DalalBaazaar Score

49 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by moderate debt load, short-term liabilities exceed short-term assets.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:01 pm

Understanding the Business

Company site ↗

The 60-second version of Tata Steel Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Tata Steel Limited engages in the manufacture and distribution of steel products in India and internationally.

IndustrySteel

SectorBasic Materials

Employees1,12,262

Annual revenue₹2.30 L Cr

How does it make money?

Turns over ₹2.30 L Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹16 left at the operating level before interest, tax and depreciation. Each of its 1,12,262 employees supports ₹2.05 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹2.05 Cr

Who are its competitors?

The closest listed comparisons in its industry are JSW STEEL LIMITED, JINDAL STEEL LIMITED, STEEL AUTHORITY OF INDIA. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 11.3% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE7.1%

What is the outlook?

31 analysts covering the stock expect revenue to grow about 67.5% and earnings to fall about 3.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+67.5%

Est. earnings growth-3.0%

Analysts31

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -5% while net margin moved +29% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-5%

Margin effect+29%

DalalBaazaar Score

49/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.6% a year
✗ Profit CAGR of only 7.2%

Quality vs. Valuation

Company Quality

45/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

55/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

19.8x

3Y Median

22.0x

40 monthly readings · mean 34.9x · range 16.6x–77.5x

Sector Median

16.5x

median of 3 sector peers

🟡Currently trading close to its 3y median of 22.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 20% above the peer median of 16.5x.

vs. its own history

Fair

22.0x median over 40 months · -10%

vs. sector peers

Fair

16.5x median of 3 peers · +20%

vs. generic bands

Fair

15x–35x

EV/EBITDA

8.5x

PEG

2.75

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 13.8% to 15.5% over 3 years.
Cash generation is improving
Free cash flow is up 172% over 3 years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

1 item require attention · 1 watch

🟡Short-term liquidity is tightFinancial
Current ratio of 0.75 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 13.8% to 15.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.

🔴 Bear CaseWhat could go wrong?

Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 14%✓ 15.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Interest cover stays above 3x✓ 3.2x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹20,505 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✓ 11.3%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 5 neutral · 0 weak

Market Cap

₹2.19 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

19.8x

Fair

Fairly valued against the generic band

P/B Ratio

2.14x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹8.85

Profitable

Profitable on a per-share basis

ROE

10.6%

Moderate

Moderate capital efficiency

ROCE

11.3%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.89x

Moderate

Moderate leverage

Revenue Growth (YoY)

14.3%

Healthy

Healthy top-line growth

Profit Growth (YoY)

11.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

2.28%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹20,505 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

9.8x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.3%

Average

Average margins

Net Margin

4.6%

Average

Average bottom-line conversion

Current Ratio

0.75

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.83

Market-like

Moves roughly in line with the market

52W Range Position

24%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

180.5 / 183.7

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

29.4

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2.42 L Cr	₹2.27 L Cr	₹2.17 L Cr	₹2.30 L Cr	-1.6%
EBITDA	₹33,249 Cr	₹22,888 Cr	₹26,496 Cr	₹35,775 Cr	+2.5%
EBITDA Margin	13.8%	10.1%	12.2%	15.5%	—
PAT (Net Profit)	₹8,760 Cr	-₹4,437 Cr	₹3,421 Cr	₹10,794 Cr	+7.2%
EPS	₹7.17	₹-3.62	₹2.74	₹8.65	+6.5%
ROE	8.5%	-4.8%	3.8%	10.6%	—
ROCE	12.9%	3.6%	8.1%	11.3%	—
Total Debt	₹84,893 Cr	₹87,082 Cr	₹94,801 Cr	₹92,382 Cr	+2.9%
Free Cash Flow	₹7,541 Cr	₹2,094 Cr	₹7,467 Cr	₹20,505 Cr	+39.6%

🟡 Revenue has been broadly flat over 3 years (-1.6% a year).

🟢 EBITDA has grown at 2.5% a year over 3 years.

🟢 EBITDA Margin has risen from 13.8% to 15.5% over 3 years (+1.8 pts).

🟢 PAT (Net Profit) has grown at 7.2% a year over 3 years.

🟢 EPS has grown at 6.5% a year over 3 years.

🟢 ROE has risen from 8.5% to 10.6% over 3 years (+2.1 pts).

🔴 ROCE has fallen from 12.9% to 11.3% over 3 years (-1.5 pts).

🔴 Total Debt has grown at 2.9% a year over 3 years.

🟢 Free Cash Flow has grown at 39.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3.01 L Cr

Total Liabilities

₹1.97 L Cr

Cash & Equivalents

₹8,885 Cr

Operating Cash Flow

₹35,064 Cr

Capex

-₹14,559 Cr

Shareholding (proxy)

Institutional Holding

35.3%

Insider Holding

35.4%

Corporate Actions

Next Earnings

11 Nov 2026

Dividend Rate

₹4

Ex-Dividend Date

12 Jun 2026

Analyst Consensus

Recommendations

20 Buy · 8 Hold · 7 Sell

Target Price (Mean)

₹216.97

+23.6% vs CMP

Target Range

₹175 – ₹260

Peer Comparison

Company	P/E	ROE
JSW STEEL LIMITED	12.0x	24.7%
JINDAL STEEL LIMITED	39.1x	5.3%
STEEL AUTHORITY OF INDIA	16.5x	7.1%

Recent News

3 mixed3 general

Tata Steel vs Hindalco vs JSW vs Nalco vs SAIL vs NMDC: Which Metal Stock To Gain From Aluminium Price Shock?

Goodreturns, 16 Oct

Tata Steel declares Q2 results 2026 date: EBITDA may decline QoQ; share price target, stop-loss and outlook in focus

Livemint, 17 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

National Steel Policy Draft Pulls Nifty Metal, Steel Stocks In Green

Outlook Money, 12 Oct

Tata Steel, JSW Steel, Jindal Steel share price targets: 3 metal stocks to buy

Business Today, 18 Aug

Tata Steel Limited Just Missed Earnings - But Analysts Have Updated Their Models

Simply Wall Street, 02 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Tata Steel shares fall 2.21% in today's session

Moneycontrol.com, 12 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongValuation

MiddlingBusiness Quality · Financial Health · Risk

WeakGrowth · Profitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

1 of 5 tripwires tripped — Debt / EBITDA stays below 2x · see Key things to watch ↑