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The market expects Tata Steel to do better than it ever has.
At today’s share price, buyers are assuming Tata Steel grows about 6% a year, forever. Over the last ten years it actually grew about 0% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
- How it is valued: Discounted cash flow.
- What the price assumes: 6% growth, against 0% the model takes from its own record.
- Ten-year record: Between FY2018 and FY2026, Tata Steel's revenue went from ₹1,33,016 crore to ₹2,32,140 crore — it compounded at about 7% a year over 8 years.
- Biggest swing factor: Indian margins. Main risk: The steel cycle.
01One company, two steel businesses
Tata Steel, founded in 1907 at Jamshedpur, is one of India's two largest steelmakers. Its Indian plants — Jamshedpur, Kalinganagar and Angul, the last acquired with Bhushan Steel in 2018 — have their own iron-ore mines, which makes them among the lowest-cost producers in the world.
In Europe it owns steelworks at IJmuiden in the Netherlands and Port Talbot in Wales, bought with Corus in 2007. Port Talbot shut its blast furnaces in 2024 as it moves to electric-arc steelmaking, and European losses have weighed on group profit for years.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Tata Steel, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Tata Steel's record, in plain numbers
Between FY2018 and FY2026, Tata Steel's revenue went from ₹1,33,016 crore to ₹2,32,140 crore — it compounded at about 7% a year over 8 years. It reported a net loss in FY2024, and closed the period with net profit of ₹10,886 crore. In FY2026 it kept 4.7% of revenue as net profit — against a low of -2.1% in FY2024 and a high of 17.1% in FY2022. The latest year added 6.2% to revenue, close to its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2018 | 1,33,016 | 17,763 | 13.4% |
| FY2019 | 1,57,669 | 9,098 | 5.8% |
| FY2020 | 1,39,817 | 1,172 | 0.8% |
| FY2021 | 1,56,294 | 8,190 | 5.2% |
| FY2022 | 2,43,959 | 41,749 | 17.1% |
| FY2023 | 2,43,353 | 8,075 | 3.3% |
| FY2024 | 2,29,171 | -4,910 | -2.1% |
| FY2025 | 2,18,543 | 3,174 | 1.5% |
| FY2026 | 2,32,140 | 10,886 | 4.7% |
04How Tata Steel gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Tata Steel's value
Indian margins
Captive iron ore gives the Indian business a cost advantage that drives most of the value.
European losses
Every year Europe loses less money adds directly to group value.
Capacity expansion in India
Kalinganagar and other expansions should lift volumes.
Debt
Lower debt reduces interest costs and risk through the cycle.
06What could go wrong
- The steel cycle. Steel prices can fall sharply when global demand weakens.
- Europe. Decarbonisation costs and weak demand could keep European losses going.
- Imports. Cheap imports can cap Indian steel prices.
07What the full Tata Steel valuation shows
Sign in free to see the complete Tata Steel valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Tata Steel's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against JSW Steel, UltraTech Cement and Coal India
- ✓Downloadable report — the full write-up, yours to keep
08Compare Tata Steel with peers
The same valuation, run side by side.
Tata Steel vs JSW SteelThe closest steel comparison, on a different debt profile.→Tata Steel vs UltraTech CementSteel and cement — the same construction demand, different cost curves.→Tata Steel vs Coal IndiaThe raw material against the metal it helps make.→09Questions people ask about Tata Steel
Why does Tata Steel lose money in Europe?
European plants face higher energy, labour and carbon costs and weaker demand, and are spending heavily to move to lower-carbon steelmaking.
Is Tata Steel's Indian business profitable?
Yes — its captive iron-ore mines make it one of the lowest-cost steel producers, and India earns most of the group's profit.
Tata Steel or JSW Steel — which is better value?
Both are valued on the same cash-flow model; the comparison page sets them side by side.
Is Tata Steel overvalued?
At ₹187 the market is pricing in roughly 6% sustained growth, against the ~0% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of Tata Steel?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Tata Steel carry?
Debt to equity stands at 0.68, against 0.55 at the start of the period — the balance sheet is a core input to the cost of capital used here.