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Synopsis : Tata Steel has experienced a slowdown in its stock momentum over the past three months, despite delivering strong long-term gains. The stock is trading near the overbought zone with an RSI of 69.3, and analysts have issued fresh price targets, ranging from Rs175 to Rs200. Although the stock has seen a short-term dip, several factors, such as a potential rebound in European operations and lower raw material costs, could support future growth. However, challenges like weak steel prices in Asia and Chinese competition remain key risks.
Price Movement and Recent Performance Over the past year, Tata Steel stock has delivered a gain of 31.17%, while it has risen by 20% in 2024 alone. From its 52-week low of Rs114.25 (November 2023), the stock has surged by 47%. However, over the last three months, it has seen a correction of around 4%, and currently trades at Rs168.15 on the BSE. Despite this correction, the stock remains above all key moving averages, which indicates its overall bullish sentiment in the market.
Fresh Price Targets Various brokerage firms have issued updated targets for Tata Steel:
Morgan Stanley upgraded Tata Steel to an "equal-weight" rating and increased its price target by nearly 30%, setting a target of Rs175 per share.
JM Financial has set a 12-month price target of Rs180, maintaining a "buy" recommendation.
Jefferies remains bullish with a target price of Rs200, expecting Tata Steel to see stronger volume growth in FY26, with its European operations showing signs of recovery.
HDFC Securities' technical analyst Subash Gangadharan suggests a price target of Rs175–Rs188 with a stop-loss at Rs150, noting that the stock has found support around Rs142 and could bounce back.
Master Capital Services' Vishnu Kant Upadhyay also targets Rs176, highlighting the stock’s favorable technical indicators, including a breakout with higher volumes and positive momentum on the MACD.
Key Risks and Outlook Despite the potential upside, analysts are mindful of certain risks, especially weak Asian steel prices and competition from Chinese imports. However, lower coking coal prices could help protect Tata Steel’s margins moving forward. Tata Steel’s European operations are also expected to see improvement, with Jefferies forecasting a recovery in EBITDA per tonne from a loss in FY24 to positive figures in FY25 and FY26.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors are encouraged to consult with their financial advisors before making investment decisions.
