Tata Steel Q1 Signals Base Building; SEBI Analysts See Rally Till ₹185 On Breakout

Strong Indian operations helped offset weak global pricing and exports in Q1. However, analysts caution about global headwinds.

Tata Steel shares were trading marginally lower on Thursday after the steelmaker reported a 118% year-on-year surge in net profit to ₹2,007 crore for Q1 FY26 after-market hours on Wednesday.

The increase was partly driven by a 3.89% reduction in total expenses, which dropped to ₹50,347 crore in the June quarter. Despite this sharp rise in profit, the company’s revenue from operations declined 2.9% to ₹53,178 crore.

Q1 Earnings Review

Tata Steel’s June quarter was impacted by global headwinds, particularly weak steel prices and export realizations. However, India operations were the bright spot, with better realizations and lower costs driving EBITDA/ton up to ₹13,029 from ₹11,747, said SEBI-registered analyst Rajneesh Sharma.

In contrast, the European business remained under pressure due to soft pricing and thin spreads. Capex stood at ₹4,700 crore for the quarter, with the full-year guidance maintained at ₹16,000 crore. Gross debt rose slightly to ₹77,550 crore but remains manageable due to healthy internal accruals.

Management continues to monitor weak global demand, particularly from China and the EU, but remains optimistic on India’s infrastructure-led growth.

Financial Independence said that the company’s improved margins and tight cost control underscore its operational efficiency. Solid performance in value-added segments and stable output from Indian operations offer optimism for the second half of the fiscal year.

Technical Charts Flash Bullish Signs

Tata Steel’s stock is showing signs of a bullish recovery, technically coiling just below a key breakout level at ₹169.14, Sharma noted.

The falling wedge breakout seen in early 2025 remains valid, and the stock has been consolidating with support near ₹158, backed by healthy volumes.

A weekly close above ₹169 could trigger a breakout toward ₹185, while a breakdown below ₹158 may push the price back to the ₹149 - ₹135 demand zone, Sharma said.

Overall, the structure is base-building with a potential shift toward momentum if resistance is breached, he added.

Retail sentiment on Stocktwits shifted remained ‘bearish’. It was 'bullish' a month back.

YTD, the shares have gained more than 16%.

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