Tata Metal shares rise 7% in two days after sturdy Q3. Ought to traders purchase now?
Consolidated web revenue attributable to house owners of the corporate jumped 723% YoY to Rs 2,689 crore from Rs 327 crore a 12 months in the past.
Income from operations rose 6% YoY to Rs 57,002 crore in Q3FY26 in contrast with Rs 53,648 crore within the corresponding quarter final 12 months. On a sequential foundation, nonetheless, revenue after tax declined 13% from Rs 3,102 crore in Q2FY26, whereas income fell 3% from Rs 58,689 crore within the July–September quarter.
EBITDA stood at Rs 8,309 crore, up 39% YoY, with margins round 15%. In India, income got here in at Rs 35,725 crore and EBITDA at Rs 8,291 crore, translating right into a margin of 23%. Crude metal manufacturing in India elevated 12% YoY to six.34 million tons, whereas deliveries rose 14% YoY to a file 6.04 million tons — the corporate’s highest-ever quarterly deliveries.
Do you have to purchase, promote or maintain?
Axis Securities has maintained a Purchase name and a goal worth of Rs 220 and expects an enchancment in spreads throughout Q4FY26. In India, spreads are more likely to develop as a Rs 3,500 per tonne restoration in HRC spot costs may raise blended NSRs by round Rs 2,300 per tonne QoQ, factoring in product combine and contracts. Though coking coal prices are projected to rise by about $15 per tonne, the impression is predicted to be largely offset by sequential quantity progress and a greater product combine, supporting an EBITDA restoration in Q4FY26.
Nomura has maintained a Purchase score on Tata Metal and set a goal worth of Rs 220, citing expectations of margin enlargement in Q4FY26 pushed by stronger HRC pricing. The brokerage expects home blended realisations per tonne to enhance by about 4% QoQ, or roughly Rs 2,300 per tonne. On the price entrance, rising coking coal costs are more likely to weigh on home operations, with administration guiding for a $15 per tonne enhance. Consolidated volumes are projected to rise 10% YoY to round 9.2 MT in Q4FY26F, resulting in an estimated sequential enhance of about Rs 400 per tonne in consolidated EBITDA to roughly Rs 10,400 per tonne.The brokerage famous that Tata Metal has delivered resilient efficiency even when HRC costs had been close to cyclical lows. Whereas FY27F and FY28F consolidated quantity forecasts stay unchanged, EBITDA estimates have been elevated by 4% on improved pricing assumptions. Nomura’s EBITDA per tonne projections for FY27F and FY28F are 5% and three% above consensus, respectively. The goal worth relies on a one-year ahead EV/EBITDA a number of of seven.0x, unchanged, whereas the inventory presently trades at round 8.1x.
Elara Capital has reiterated its Accumulate score on Tata Metal and raised its goal worth to Rs 215 from Rs 187, citing the latest uptick in metal costs since mid-December and the imposition of safeguard duties on imports, that are anticipated to assist near-term earnings progress. The brokerage has elevated its EBITDA estimates for FY26 by 2% whereas sustaining projections for FY27 and FY28E.
Elara famous that the anticipated discount in funding overhang from home operations towards EU companies has led it to revise the valuation a number of for home operations to six.5x EV/EBITDA from 6.0x earlier, whereas retaining a 5.0x a number of for different companies. It has additionally rolled ahead its valuation base to December 2027E from September 2027E, ensuing within the
(Disclaimer: The suggestions, strategies, views, and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions.)
