TATASTEEL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.2

📊 Fundamental Analysis Summary

Metric Value Interpretation

Market Cap ₹2,01,884 Cr Large-cap, stable

Current Price ₹162 Near 52-week high

Stock P/E 60.8 Extremely overvalued vs. industry PE of 22.4

PEG Ratio -1.08 Negative PEG suggests poor earnings growth

ROE / ROCE 3.62% / 8.83% Weak profitability metrics

Dividend Yield 2.23% Decent yield, but not high enough to offset valuation

Debt-to-Equity 1.04 Moderately leveraged

EPS (TTM) ₹2.74 Low earnings relative to price

FII/DII Change -1.07% / +1.59% DII buying, FII selling — mixed sentiment

📈 Technical & Trend Analysis

RSI (53.8): Neutral zone — neither overbought nor oversold.

MACD (1.03): Mild bullish crossover.

DMA 50 / 200: ₹158 / ₹151 — price is above both, indicating short-term bullishness.

Volume: Stable, matching weekly average.

Price Trend: Higher-high, higher-low structure since Jan 2025 low of ₹123

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🧠 Long-Term Investment Outlook

Tata Steel is investing in

Green steel initiatives (hydrogen-based production, carbon capture)

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Digital transformation (AI, automation)

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Capacity expansion to 30 MnTPA by 2030

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However, current metrics suggest

Low profitability

High valuation

Cyclical industry exposure

Limited near-term upside

Brokerages are divided

Motilal Oswal: Neutral, TP ₹165

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Antique Broking: Buy, TP ₹174

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Axis Securities: Sell, TP ₹138

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🎯 Ideal Entry Price Zone

Based on valuation and support levels

Buy Zone: ₹145–₹155

Near DMA 50/200 and historical support

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Below ₹150 offers better margin of safety

Avoid buying above ₹165, as upside is capped and valuation is stretched.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 2–3 years minimum to benefit from strategic transformation.

Exit Triggers

Price > ₹175–₹180 (resistance zone) — consider partial profit booking

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ROE/ROCE remain stagnant or decline further

Steel cycle turns negative or global tariffs impact margins

Hold if

Price stays above ₹150 with improving volume

ROE/ROCE trend upward

Cost takeout and green steel initiatives show results

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Would you like a comparison with JSW Steel or SAIL to see how Tata Steel stacks up against peers?

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in.tradingview.com

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marketinsightsindia.in

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www.tatasteel.com

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Goodreturns

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cfo.economictimes.indiatimes.com

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