The brokerage house Motilal Oswal issued a Buy call on this Tata Group stock with a target price of Rs 210. According to the brokerage report, this implies an upside potential of around 27% from current levels.
In the list of Tata Group stocks, the firm that is in focus here is ‘Tata Steel‘
The firm’s optimism is largely tied to Tata Steel’s latest acquisition move, its long-term strategy for India, and a multi-year expansion roadmap.
Let’s take a look at the key reasons behind the bullish view –
Motilal on Tata Steel: A major acquisition sets the tone
The brokerage report highlighted that Tata Steel has taken a significant step by agreeing to acquire a 50.01% stake in Thriveni Pellets (TPPL). As per the brokerage report, “Tata Steel on 10th Dec’25 has agreed to acquire a 50.01% stake in Thriveni Pellets (TPPL) from Thriveni Earthmovers (TEMPL) for a cash consideration of Rs 6.36 billion.”
With this deal, Tata Steel will get access to a 4 million tonnes per annum pellet plant and a 212-kilometre slurry pipeline operated by Brahmani River Pellets (BRPL), which is a full subsidiary of TPPL. The facility’s location in Jajpur, Odisha, fits well with Tata Steel’s eastern India operations.
According to the brokerage report, “After the deal completion, Tata Steel will become the controlling shareholder of TPPL, while Lloyds Metals & Energy (LMEL) will continue as a partner with a 49.99% stake.”
The company sees the acquisition as a way to secure long-term raw material requirements. Since pellets are critical for Blast Furnace–Basic Oxygen Furnace (BF–BOF) and Direct Reduced Iron (DRI) units, backward integration becomes strategically important, especially with some iron ore mining leases set to expire by FY30.
As the report noted, “The proposed acquisition is a non-related-party transaction and requires approval from the Competition Commission of India (CCI). Tata Steel expects to close the transaction within 3–4 month.”
Motilal on Tata Steel: A long-term India-focused strategy
Alongside the acquisition, Tata Steel is doubling down on its India business. The brokerage report pointed out that the company has reiterated its long-term roadmap, which includes increasing volumes, expanding value-added products, improving mining infrastructure, and investing in low-carbon steelmaking technology.
As per the brokerage report, “The company is prioritizing capex in India (while Europe restructuring is largely in process) and moving into a growth-acceleration phase.”
Motilal on Tata Steel: Expansion phase and improving raw material security
The TPPL acquisition is also being viewed as a margin-supportive move over the long term. With a 4 MTPA pellet plant and a lengthy slurry pipeline coming under its control, Tata Steel strengthens its feedstock supply chain for upcoming expansions. This becomes a key advantage, especially when some iron ore mining licenses are nearing expiry in FY30.
According to the brokerage, “The company is entering a multi-year expansion phase, with parallel bets across long/flat and downstream products. Capex intensity will rise but remain phased, keeping leverage within comfort.”
The Memorandum of Understanding (MoU) with Lloyds Metals & Energy also allows Tata Steel to explore opportunities in the Gadchiroli iron-ore-steel cluster, giving it more flexibility for future projects.
Motilal on Tata Steel: Valuations and what lies ahead
Tata Steel remains one of the major players in India’s steel industry, and the brokerage believes the company is positioned to benefit from better steel price realisations and domestic demand. However, it also cautions that global uncertainties could create near-term challenges.
According to the brokerage report, “At CMP, Tata Steel is trading at 6.5x EV/EBITDA and 1.8x FY27E P/B. We maintain our ‘Buy’ rating with an SOTP-based Target price of Rs 210, based on Sep’27E EPS.”
