Antique Stock Broking, a prominent domestic brokerage, has expressed a strong preference for Tata Steel within the Indian metals and mining sector. The firm's latest analysis underscores Tata Steel's strategic advantages, including a significant 75 percent share of flat products in its portfolio and the ongoing ramp-up of its 5 million tonnes per annum (mtpa) Kalinganagar blast furnace and 2.2 mtpa cold rolling mill complex. These factors are expected to contribute to substantial volume growth and an improved product mix for the company.
Why Tata Steel Leads Antique's Picks
According to Antique, Tata Steel has been actively implementing various cost optimization initiatives designed to bolster its EBITDA growth. While acknowledging that these gains might be partially offset by higher coking coal costs, the brokerage remains optimistic.
A significant factor supporting Tata Steel's European operations is the upcoming implementation of the Carbon Border Adjustment Mechanism (CBAM) and potentially stricter import quotas. Antique believes these measures will help support European domestic steel prices by curbing imports, thereby aiding Tata Steel's performance in the region. The brokerage has set a target price of Rs 235 for Tata Steel.
Other Key Recommendations
Beyond Tata Steel, Antique Stock Broking also maintains a 'Buy' rating for Jindal Steel, with an unchanged target price of Rs 1,318. However, the firm has assigned 'Hold' ratings for JSW Steel Ltd and Steel Authority of India Ltd (SAIL), with target prices of Rs 1,151 and Rs 167, respectively.
Indian Steel Market Outlook
The domestic steel market demonstrates robust demand, with the World Steel Association projecting India's demand to increase by 7.4 percent year-on-year in 2026 and 9.2 percent year-on-year in 2027. Provisional data from the Joint Plant Committee (JPC) indicates that steel demand grew by 7.6 percent year-on-year to 163.7 mt during FY26, and by 8.1 percent year-on-year to 13 mt in April.
Factors such as rising Chinese steel prices, driven by increased coking coal costs, and the Indian government's safeguard duty have positively influenced domestic steel prices. Antique anticipates that production rationalization in China combined with resilient domestic demand will continue to support Indian steel players. Nevertheless, firm coking coal and iron ore costs could moderate sequential margin expansion. Additionally, the planned commissioning of approximately 15 mtpa of new crude steel capacity by FY28 could potentially limit the upside potential for domestic steel prices.