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Tata Steel Ltd logo

Tata Steel Ltd

NSE: TATASTEEL BSE: 500470

â‚ą208.02

(3.11%)

Sun, 07 Jun 2026, 02:11 pm

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Tata Steel Analysis

dividend

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Pros

  • Dividends paid are well covered by earnings (4x coverage).
  • Dividends after 3 years are expected to be well covered by earnings (3.1x coverage).
  • Tata Steel's pays a higher dividend yield than the bottom 25% of dividend payers in India (0.76%).
  • Tata Steel's dividend is above the markets top 25% of dividend payers in India (3.08%).
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Cons

  • Dividends per share have fallen over the past 10 years.
  • Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

future

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Pros

  • Tata Steel's earnings are expected to grow significantly at over 20% yearly.
  • Tata Steel's earnings growth is expected to exceed the India market average.
  • Tata Steel's earnings growth is expected to exceed the low risk savings rate of 7.2%.
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Cons

  • Cash flow for Tata Steel is expected to decrease over the next 2 years.
  • Tata Steel is expected to be loss making next year.
  • Tata Steel's net income is expected to decrease over the next 2 years.
  • Tata Steel is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
  • Performance (ROE) is not expected to exceed the current IN Metals and Mining industry average.
  • A decline in Tata Steel's performance (ROE) is expected over the next 3 years.
  • Tata Steel's revenue is expected to decrease over the next 2 years.
  • Tata Steel's revenue is expected to grow by 3.1% yearly, however this is not considered high growth (20% yearly).
  • Tata Steel's revenue growth is positive but not above the India market average.

health

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Pros

  • Tata Steel is profitable, therefore cash runway is not a concern.
  • Tata Steel is profitable, therefore cash runway is not a concern.
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Cons

  • Tata Steel's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Debt is not well covered by operating cash flow (18.8%, less than 20% of total debt).
  • Debt is not covered by short term assets, assets are 0.6x debt.
  • Tata Steel's long term commitments exceed its cash and other short term assets.
  • The level of debt compared to net worth has increased over the past 5 years (128.5% vs 131.3% today).
  • Interest payments on debt are not well covered by earnings (EBIT is 1.8x annual interest expense, ideally 3x coverage).
  • Tata Steel's level of debt (131.3%) compared to net worth is high (greater than 40%).
  • High level of physical assets or inventory.

management

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Pros

  • The tenure for the Tata Steel board of directors is about average.
  • Thachat's compensation has been consistent with company performance over the past year, both up more than 20%.
  • The average tenure for the Tata Steel management team is over 5 years, this suggests they are a seasoned and experienced team.
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Cons

  • Thachat's remuneration is higher than average for companies of similar size in India.

past

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Pros

  • Tata Steel has delivered over 20% year on year earnings growth in the past 5 years.
  • Tata Steel has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).
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Cons

  • Tata Steel's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Tata Steel used its assets less efficiently than the IN Metals and Mining industry average last year based on Return on Assets.
  • Tata Steel has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Tata Steel's 1-year earnings growth is negative, it can't be compared to the IN Metals and Mining industry average.

value

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Pros

  • Tata Steel is good value based on assets compared to the IN Metals and Mining industry average.
  • Tata Steel is good value based on expected growth next year.
  • Tata Steel is good value based on earnings compared to the IN Metals and Mining industry average.
  • Tata Steel is good value based on earnings compared to the India market.
  • BSE:500470 is up 12.9% outperforming the Metals and Mining industry which returned 7.5% over the past month.
  • BSE:500470 is up 12.9% outperforming the market in India which returned 8% over the past month.
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Cons

  • Tata Steel's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).
  • Tata Steel's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).
  • 500470 underperformed the Metals and Mining industry which returned -28.6% over the past year.
  • 500470 underperformed the Market in India which returned -14.5% over the past year.